Delhi District Court
Pappu Seth vs Municipal Corporation Of Delhi on 24 September, 2025
IN THE COURT OF MANOJ KUMAR-I: DISTRICT JUDGE
(COMMERCIAL COURT)-5, CENTRAL DISTRICT, TIS HAZARI,
DELHI
CNR No. DLCT01-016158-2024
CS (Comm) No. 1129/2024
In the matter of:
Pappu Seth,
Sole Proprietor of,
M/s Pappu Seth,
Residence & Office at
61/10, Ramjas Road,
Karol Bagh, New Delhi - 110 005. ... Plaintiff
VERSUS
Municipal Corporation of Delhi,
Through its Commissioner,
Civic Centre, Minto Road,
New Delhi - 110002. ... Defendant
Date of Institution : 15.10.2024
Date of Reserving judgment : 20.9.2025
Date of pronouncement : 24.9.2025
For Plaintiff : Mr. Vikas Sharma, Advocate
For Defendant : Mr. Mohit Chaurasia, Advocate
CS (COMM) No. 1129/2024 Page No. 1 of 61
JUDGMENT:
This is a suit for recovery of ₹23,11,132/- instituted by plaintiff Pappu Seth, sole proprietor of M/s Pappu Seth against the Municipal Corporation of Delhi.
2. Facts, as per the plaintiff's version, are that the plaintiff is a contractor, duly registered with the defendant; that the plaintiff is the sole proprietor of M/s Pappu Seth and has been executing various works of the defendant for last so many years; that Work Order Nos. EE (M- SZ-I) (EE IV)/SYS/2019-2020/211, EE (M-SZ-I) (EE IV)/SYS/2019- 2020/258, EE (M-SZ-I)(EE IV)/SYS/2019-2020/87, EE (M-SZ-I) (EE IV)/SYS/2019-2020/355, EE (M-SZ-I) (EE IV)/SYS/2019-2020/335, EE (M-SZ-I) (EE IV)/SYS/2019-2020/259, EE (M-SZ-I) (EE IV)/SYS/2019-2020/13 and EE (M-SZ-I) (EE IV)/SYS/2019-2020/333, dated 20.11.2019, 27.11.2019, 28.10.2019, 03.01.2020, 26.12.2019, 27.11.2019, 25.6.2019 and 26.12.2019 respectively for contractual amount of ₹11,32,068/-, ₹4,25,965/-, ₹4,33,209/-, ₹7,26,151/-, ₹6,74,657/-, ₹4,25,965/-, ₹4,15,238/- and ₹6,07,012/- by the Executive Engineer of the corporation (defendant).
3. In respect of Work Order No. EE(M-SZ-I) (EE IV)/SYS/2019-2020/211 (hereinafter also referred to as 'Work Order No.
211) it is further averred in the plaint that at the time of submission of tender an amount of ₹35,700/- was deposited by the plaintiff as earnest money; that agreement was also executed between the parties; that the work was required to be completed within three months; that the SDOS CS (COMM) No. 1129/2024 Page No. 2 of 61 (scheduled date of start) and SDOC (scheduled date of completion) of work, as per the agreement, were 30.11.2019 and 29.02.2020 respectively; that there was delay in handing over site to the plaintiff; that the plaintiff started the work on 25.5.2020 and completed the same to the satisfaction of the corporation; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1st RA bill on 06.10.2022 for gross value of ₹11,32,068/-, that is, the contractual amount; that from the said bill the corporation illegally withheld an amount of ₹10,000/- thereby reducing the gross value of the bill to ₹11,22,068/-; that from the said bill the defendant also deducted an amount of ₹77,507/- towards security after adjusting earnest money of ₹35,700/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹9,87,957/-; that against the same the corporation made payment of ₹7,63,889/- only on 31.10.2022 leaving a balance of ₹2,24,068/- against 1 st Bill; that the plaintiff by letter dated 06.12.2023 requested the concerned Executive Engineer of the defendant to release the due payment and also release the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that by letter dated 06.12.2023 the plaintiff also submitted the final bill for ₹10,000/- which was withheld from the 1 st bill; that the said letter dated 06.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against diary No. 9945; that in CS (COMM) No. 1129/2024 Page No. 3 of 61 respect of EE(M-SZ-I) (EE IV)/SYS/2019-2020/211 following amounts are payable by the defendant to the plaintiff, namely, (i) Refund of the amount of security deposit inclusive of Earnest Money = ₹1,13,207/-,
(ii) Balance amount due under 1st RA Bill = ₹2,24,068/-, and (iii) Illegal withheld amount /Final Bill= ₹10,000/- (Total = ₹3,47,275/-).
4. In respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/258 (hereinafter also referred to as 'Work Order No.
258) it is further averred in the plaint that at the time of submission of tender an amount of ₹8700/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within two months; that the SDOS and SDOC of work, as per the agreement were 05.12.2019 and 04.02.2020 respectively; that there was delay in handing over site to the plaintiff and the plaintiff started the work on 01.4.2021 and completed the same to the satisfaction of the corporation on 05.10.2021; that EOT (extension of time) was also granted by the defendant without any penalty; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1st RA bill on 24.3.2022 for gross value of ₹4,25,945/-, that is, the contractual amount; that from the said bill the corporation also deducted an amount of ₹33,895/- towards security after adjusting earnest money of ₹8700/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹3,65,754/-;
CS (COMM) No. 1129/2024 Page No. 4 of 61that against the same the corporation made payment of ₹1,61,809/- only on 31.3.2022 leaving a balance of ₹2,03,945/- against the 1 st Bill; that the plaintiff by letter dated 07.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that vide letter dated 07.12.2023 the plaintiff also submitted the final bill for ₹5000/- which was withheld from the 1st bill; that the said letter dated 07.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against diary No. 9946; that in respect of the Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/258 following amounts are payable by the defendant to the plaintiff, namely, (i) Refund of the amount of security deposit inclusive of Earnest Money = ₹42,595/-, (ii) Balance amount due under 1st RA Bill = ₹2,03,945/-, and (iii) Illegal withheld amount /Final Bill = ₹5,000/- (Total = ₹2,51,890/-).
5. In respect of Work Order No. EE (M-SZ-I)(EE IV)/SYS/2019-2020/87 (hereinafter also referred to as 'Work Order No.
87) it is further averred in the plaint that at the time of submission of tender an amount of ₹8700/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within two months; that the SDOS and SDOC of work, as per agreement were 08.11.2019 and 07.01.2020 respectively; that there was delay in handing over site to the plaintiff and the plaintiff started the work on 29.7.2021 and CS (COMM) No. 1129/2024 Page No. 5 of 61 completed the same to the satisfaction of the corporation on 10.9.2021; that EOT was also granted by the defendant corporation without penalty; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1st RA bill on 28.7.2022 for gross value of ₹4,32,271/-; that from the said bill the corporation also withheld illegally an amount of ₹4000/- thereby reducing the gross value of the bill to ₹4,28,271/-; that from the said bill the corporation also deducted an amount of ₹34,527/- towards security after adjusting earnest money of ₹8700/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹3,72,130/-; that against the same the corporation made payment of ₹1,60,859/- only on 26.8.2022 leaving a balance of ₹2,11,271/- against 1 st Bill; that the plaintiff by letter dated 07.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that by letter dated 07.12.2023 the plaintiff also submitted the final bill for ₹4000/- which was withheld from the 1 st Bill; that the said letter dated 07.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against diary No. 9947; that in respect of the EE (M-SZ-I) (EE IV)/SYS/2019-2020/87 following amounts are payable by the defendant to the plaintiff, namely, (i) Refund of the amount of security deposit inclusive of Earnest Money = ₹43,227/-, (ii) Balance amount CS (COMM) No. 1129/2024 Page No. 6 of 61 due under 1st RA Bill = ₹2,11,271/-, and (iii) Illegal withheld amount /Final Bill = ₹4,000/- (Total = ₹2,58,498/-).
6. In respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 ((hereinafter also referred to as 'Work Order No. 355) it is further averred in the plaint that at the time of submission of tender an amount of ₹16,200/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within three months; that the SDOS and SDOC of work, as per agreement were 12.01.2020 and 11.4.2020 respectively; that there was delay in handing over site to the plaintiff and the plaintiff started the work on 09.8.2021 and completed the same to the satisfaction of the corporation on 15.9.2021; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1 st RA bill on 30.11.2021 for gross value of ₹7,25,192/-; that from the said bill the corporation also withheld illegally an amount of ₹5000/- thereby reducing the gross value of the bill to ₹7,20,192/-; that from the said bill the corporation also deducted an amount of ₹56,519/- towards security after adjusting earnest money of ₹6,200/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹6,27,413/-; that the said payment was made by the department in two installments of ₹3,11,221/- and ₹3,21,192/- on 13.12.2021 and 13.3.2024 respectively; that thereafter, the corporation prepared and passed 2 nd Final bill for CS (COMM) No. 1129/2024 Page No. 7 of 61 amount of ₹5000/- and said amount was also released; that the plaintiff by letter dated 07.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that the said letter dated 07.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against diary No. 9948; that in respect of the Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019- 2020/355 the defendant is liable to refund the amount of security deposit inclusive of earnest money in the sum of ₹72,719/-.
7. In respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/335 (hereinafter also referred to as 'Work Order No.
335) it is further averred in the plaint that at the time of submission of tender an amount of ₹15,050/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within three months; that the SDOS and SDOC of work, as per agreement were 04.01.2020 and 03.4.2020 respectively; that there was delay in handing over site to the plaintiff and the plaintiff started the work on 23.7.2021 and completed the same to the satisfaction of the corporation on 26.8.2021; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1 st RA bill on 07.12.2021 for gross value of ₹6,74,352/-; that from the said bill the corporation also CS (COMM) No. 1129/2024 Page No. 8 of 61 withheld illegally an amount of ₹5000/- thereby reducing the gross value of the bill to ₹6,69,352/-; that from the said bill the corporation also deducted an amount of ₹52,385/- towards security after adjusting earnest money of ₹15,050/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹5,83,248/-; that the said payment were released in two installments of ₹2,89,896/- and ₹2,98,352/- on 10.01.2022 and 13.3.2024 respectively; that thereafter, the corporation prepared and passed 2 nd Final bill on 28.8.2023 for amount of ₹5000/- and said payment was also made; that the plaintiff by letter dated 07.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that the said letter dated 07.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against the diary No. 9949; that in respect of the Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019- 2020/335 the defendant is liable to refund the amount of security deposit inclusive of earnest money in the sum of ₹67,435/-.
8. In respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/259 (hereinafter also referred to as 'Work Order No.
259) it is further averred in the plaint that at the time of submission of tender an amount of ₹8700/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within two months;
CS (COMM) No. 1129/2024 Page No. 9 of 61that the SDOS and SDOC of work, as per agreement were 07.12.2019 and 06.02.2020 respectively; that there was delay in handing over site to the plaintiff and the plaintiff started the work on 29.7.2021 and completed the same to the satisfaction of the corporation on 04.9.2021; that EOT was also granted by the defendant without any penalty; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1st RA bill on 29.7.2022 for gross value of ₹4,25,082/-, that is, the contractual amount; that from the said bill the corporation also withheld illegally an amount of ₹4000/- thereby reducing the gross value of the bill to ₹4,21,082/-; that from the said bill the corporation also deducted an amount of ₹33,808/- towards security after adjusting earnest money of ₹8700/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹3,66,019/-; that against the same the corporation made payment of ₹1,61,937/- only on 26.8.2022 leaving a balance of ₹2,04,082/- against the 1st Bill; that the plaintiff by letter dated 07.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that by letter dated 07.12.2023 the plaintiff also submitted the final bill for ₹4000/- which was withheld from the 1st Bill; that the said letter dated 07.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 CS (COMM) No. 1129/2024 Page No. 10 of 61 against diary No. 9950; that in respect of the EE (M-SZ-I) (EE IV)/SYS/2019-2020/259 following amounts are payable by the defendant to the plaintiff, namely, (i) Refund of the amount of security deposit inclusive of Earnest Money = ₹42,508/-, (ii) Balance amount due under 1st RA Bill = ₹2,04,082/-, and (iii) Illegal withheld amount /Final Bill = ₹4,000/- (Total = ₹2,50,590/-).
9. In respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/13 (hereinafter also referred to as 'Work Order No.
13) it is further averred in the plaint that at the time of submission of tender an amount of ₹11,450/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within three months; that the SDOS and SDOC of work, as per agreement were 04.7.2019 and 03.10.2019 respectively; that the plaintiff started the work on 04.7.2019 and completed the same to the satisfaction of the corporation on 03.10.2019; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1 st RA bill on 28.4.2020 for gross value of ₹4,15,068/-, that is, the contractual amount; that from the said bill the corporation also withheld illegally an amount of ₹1,00,000/- thereby reducing the gross value of the bill to ₹3,15,068/-; that from the said bill the corporation also deducted an amount of ₹30,057/- towards security after adjusting earnest money of ₹11,450/- deposited by the plaintiff and after making other statutory CS (COMM) No. 1129/2024 Page No. 11 of 61 deductions passed the bill for an amount of ₹2,66,481/-; that against the same the corporation made payment of ₹2,00,413/- only on 01.6.2020 leaving a balance of ₹66,068/- against the 1 st Bill; that the plaintiff by letter dated 06.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that by letter dated 06.12.2023 the plaintiff also submitted the Final bill for ₹1,00,000/- which was withheld from the 1st Bill; that the said letter dated 06.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against diary No. 9951; that in respect of the EE (M-SZ-I) (EE IV)/SYS/2019-2020/13 following amounts are payable by the defendant to the plaintiff, namely, (i) Refund of the amount of security deposit inclusive of Earnest Money = ₹41,507/-, (ii) Balance amount due under 1st RA Bill = ₹66,068/-, and (iii) Illegal withheld amount /Final Bill = ₹1,00,000/- (Total = ₹2,07,575/-).
10. In respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/333 (hereinafter also referred to as 'Work Order No.
333) it is further averred in the plaint that at the time of submission of tender an amount of ₹13,550/- was also deposited by the plaintiff as earnest money; that the agreement was also executed between the parties; that the work was required to be completed within three months; that the SDOS and SDOC of work, as per agreement were 04.01.2020 and 03.04.2020 respectively; that there was delay in handing over site to CS (COMM) No. 1129/2024 Page No. 12 of 61 the plaintiff and the plaintiff started the work on 05.4.2021 and completed the same to the satisfaction of the corporation on 29.07.2021; that EOT was also given by the defendant without any penalty; that after completion of the entire work the engineer of the corporation measured the work executed by the plaintiff and thereafter, the engineer of the corporation prepared and passed the 1 st RA bill on 12.10.2021 for gross value of ₹6,06,356/-, that is, the contractual amount; that from the said bill the corporation also withheld illegally an amount of ₹20,000/- thereby reducing the gross value of the bill to ₹5,86,356/-; that from the said bill the corporation also deducted an amount of ₹47,086/- towards security after adjusting earnest money of ₹13,550/- deposited by the plaintiff and after making other statutory deductions passed the bill for an amount of ₹5,08,951/-; that against the same the corporation made payment of ₹2,60,595/- only on 29.10.2021 leaving a balance of ₹2,48,356/- against the 1st Bill; that the plaintiff by letter dated 06.12.2023 requested the Executive Engineer concerned of the corporation to release the due payment and the security amount inclusive of earnest money; that there is no labour complaint pending against the plaintiff qua the work in question as on date; that by letter dated 06.12.2023 the plaintiff also submitted the Final bill for ₹20,000/- which was withheld from the 1st Bill; that the said letter dated 06.12.2023 was served in the office of the Executive Engineer concerned on 08.12.2023 against diary No. 9958; that in respect of the Work Order No. EE (M- SZ-I) (EE IV)/SYS/2019-2020/333 the following amounts are payable CS (COMM) No. 1129/2024 Page No. 13 of 61 by the defendant to the plaintiff, namely, (i) Refund of the amount of security deposit inclusive of Earnest Money = ₹60,636/-, (ii) Balance amount due under 1st RA Bill = ₹2,48,356/-, and (iii) Illegal withheld amount /Final Bill = ₹20,000/- (Total = ₹3,28,992/-).
11. It is further averred in the plaint that in respect of the said eight work orders an amount of ₹4,83,834/- is payable qua security amount inclusive of earnest money along with interest after expiry of one year from the date of completion qua all the work orders as mentioned hereinabove and another amount of ₹13,00,790/- towards the passed bills amount/illegally withheld amount qua all work orders as mentioned above; that the total amount which is due and payable to the plaintiff is ₹17,84,624/-; that the work was executed by the plaintiff to the satisfaction of all concerned of corporation; that no defect in the work executed by the plaintiff has ever been pointed out by the corporation and thus, there was/is no question of not releasing the amount as claimed; that there has never been any justification for not making the payment of aforesaid amount; that the plaintiff has been hard pressed for his due amount by the department without any rhyme and reason; that original of all the bills are in the power and possession of the defendant corporation; that the plaintiff thereafter, got issued a legal notice dated 04.01.2024 on the defendant under section 478 of the Delhi Municipal Corporation Act demanding his due payment with interest; that after the issuance of legal notice the plaintiff received the balance amount of Work Order Nos. 335 and 355 on 13.3.2024; that the plaintiff CS (COMM) No. 1129/2024 Page No. 14 of 61 is a contractor and thus has been deprived of the use and investment of his due amount as mentioned hereinabove and thus, the corporation is also liable to pay ₹5,26,508/- as interest at the rate of 12% p.a. on the aforesaid amount of ₹17,84,624/-, that is, on the bill amount and withheld amount from the date of passing of the respective bills and on the security cum earnest money after expiry of one year from the date of completion till the date of payment; that the total amount which the corporation is liable to pay to the plaintiff is ₹17,84,624/- (principal amount) + ₹5,26,508/- (interest) and the total comes to ₹23,11,132/-; that when needful was not done the plaintiff got issued legal notice dated 04.01.2024 on the Commissioner of the defendant department and the said notice was sent through speed post on 16.01.2024; that the plaintiff also filed pre-litigation mediation but the defendant department did not participate in the same and thus, the same remains non-starter; that the non-starter report dated 07.8.2024 is annexed with the suit. It is further stated in the plaint that due to the acts of the defendant a cause of action arose in favour of the plaintiff leading upto the institution of the present suit.
12. The suit is contested by the defendant by way of a written statement wherein preliminary objections are taken to the effect that the suit in respect of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019- 2020/211 dated 20.11.2019, Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/258 dated 27.11.2019, Work Order No. EE (M-SZ- I) (EE IV)/SYS/2019-2020/87 dated 28.10.2019, Work Order No. EE CS (COMM) No. 1129/2024 Page No. 15 of 61 (M-SZ-I) (EE IV)/SYS/2019-2020/355 dated 03.01.2020, Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 dated 26.12.2019, Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/259 dated 27.11.2019, Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/13 dated 25.6.2019 and Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019- 2020/333 dated 26.12.2019 is premature and without any cause of action; that the plaintiff has approached this court with unclean hands and has concealed that it is in material breach of the agreement between the parties as per the General Conditions of Contract (GCC); that at the time of issuance of Work Order, an agreement was entered into between the parties; that the plaintiff has not submitted certain documents which are necessary for making the payment; that the contractor must comply with statutory provisions before realization of the payment; that the plaintiff failed to fulfill the guidelines laid down in the judgment dated 22.3.2018 entitled EDMC v. Ashwani Kumar Aggarwal; that GCC make it fundamentally clear that a contractor (such as the plaintiff) is required to submit and present bills (both interim and final) to the defendant for payment which he was contractually required to do, and is in breach of agreement between the parties as per clauses 7 and 9 of the GCC and clause 4 of the Work Orders; that in absence of any bill no amount can be said to be due or payable to the plaintiff; that the purported bills that the plaintiff seeks to rely upon are only part of the documents that is required for clearing of the payment; that in order to release the final payment the plaintiff must file proper final bill in terms of the judgment CS (COMM) No. 1129/2024 Page No. 16 of 61 of the Hon'ble Delhi High Court, clause 4 of the Work Order and condition contained in GCC as regards submission of proper bill along with measurement, photograph, etc. without which the bill cannot be cleared for payment; that the issue regarding failure of contractors to submit bills has been dealt with by the Hon'ble Delhi High Court in its judgment dated 22.3.2018 entitled North Delhi Municipal Corporation v. Sanjeev Kumar, RAF 430/2017; that it is evident that not only is the plaintiff under a contractual obligation to submit bills to the defendant in accordance with the condition in terms of the aforesaid mandate by law and GCC in order for it to become due and payable; that having failed to comply with clauses 17 and 45 of GCC, the plaintiff is not entitled to refund of security deposit; clause 17 of the GCC makes it clear that a contractor (such as the plaintiff) is required to wait for a period of 12 months from the submission of the final bills to reclaim the security amount deposited by him; that in view of the fact that the plaintiff has failed to submit the final bill, the stage for refund of the security deposit has not arisen; that additionally, clause 45 of the GCC requires that a contractor (such as the plaintiff) to submit a labour certificate in order to seek refund of the security deposit; that it is an admitted position that till date the plaintiff has not complied with requirements of labour clearance and has neither applied for nor obtained the necessary labour clearance certificate as required under clause 45 of the GCC; that the plaintiff has not even applied for a "No Objection Certificate" from the legal department of the defendant; that unless the procedure prescribed under CS (COMM) No. 1129/2024 Page No. 17 of 61 the GCC is complied with, the stage for return of the security deposit does not even arise; that the Hon'ble Delhi High Court in North Delhi Municipal Corporation v. Sanjeev Kumar, RAF 430/2017 has also held that for refund of the security deposit, the contractor (such as the plaintiff) must apply for the labour clearance certificate; that unless the provisions of clause 17 and 45 of the GCC are complied with, the claim for return of the security deposit is pre-mature and untenable; that the plaintiff has failed to demonstrate any cause of action in respect of the claim of refund of security deposit too; that the court has no territorial jurisdiction to entertain the suit as no cause of action has arisen within the jurisdiction of this court; that the suit is barred under Order 2 Rule 3 as the plaintiff cannot join two or more cause of action in one suit. In the written statement issuance of work orders in favour of the plaintiff is not denied. It is stated in the written statement that the plaintiff did not complete the work within stipulated time. It is further stated in the written statement that the plaintiff has breached the GCC and the conditions mentioned in the work orders and have not submitted the final bills and certificates from the labour department. It is further stated in the written statement that the suit be dismissed.
13. The plaintiff filed a replication to the written statement of the defendant wherein the defence taken by the defendant is traversed and the averments made in the plaint are reiterated.
14. In support of his case, along with the plaint, the plaintiff has filed documents, namely, copy of Work Order No. 211 dated 20.11.2019, CS (COMM) No. 1129/2024 Page No. 18 of 61 first RA Bill dated 06.10.2022 pertaining to Work Order No. 211, letter and final bill dated 06.12.2023 submitted by the plaintiff pertaining to Work Order No. 211; copy of Work Order No. 258 dated 27.11.2019, first RA bill dated 24.3.2022 pertaining to Work Order No. 258, EOT (extension of time) granted by the plaintiff in respect of Work Order No. 258, letter and final bill dated 07.12.2023 submitted by the plaintiff in respect of Work Order No. 258; copy of Work Order No. 87 dated 28.10.2019, first RA bill dated 28.7.2022 pertaining to Work Order No. 87, EOT granted by the plaintiff in respect of Work Order No. 87, letter and final bill dated 07.12.2023 submitted by the plaintiff in respect of work order No. 87; copy of Work Order No. 355 dated 03.01.2020, first RA bill dated 30.11.2021 pertaining to Work Order No. 355, second final bill dated 26.7.2023 pertaining to Work Order No. 355, letter dated 03.6.2023 issued by the MLA, letter and final bill dated 07.12.2023 submitted by the plaintiff in respect of Work Order No. 355; copy of work order No. 335 dated 26.12.2019, first RA Bill dated 07.12.2021 pertaining to Work Order No. 335, second final bill dated 26.7.2023 pertaining to Work Order No. 335, letter dated 03.6.2023 issued by the MLA, letter and final bill dated 07.12.2023 submitted by the plaintiff in respect of Work Order No. 335; copy of Work Order No. 259 dated 27.11.2019, first RA bill dated 29.7.2022 pertaining to Work Order No. 259, EOT granted by the defendant in respect of Work Order No. 259, letter and final bill dated 07.12.2023 submitted by the plaintiff in respect of Work Order No. 259; copy of Work Order No. 13 dated 25.6.2019, CS (COMM) No. 1129/2024 Page No. 19 of 61 first RA bill dated 28.4.2020 pertaining to Work Order No. 13, letter and final bill dated 06.12.2023 submitted by the plaintiff in respect of work order No. 13. letter dated 16.11.2021 issued by MLA; copy of Work Order No. 333 dated 26.12.2019, first RA bill dated 12.10.2021 pertaining to Work Order No. 333, EOT granted by the defendant in respect of Work Order No. 333, letter and final bill dated 06.12.2023 submitted by the plaintiff in respect of Work Order No. 333; copy of legal notice dated 04.01.2024, Non Starter report dated 07.8.2024 and copy of Registration Certificate of the plaintiff's firm.
15. In the affidavit of admission-denial of the plaintiff's documents dated 10.12.2024 filed on behalf of the defendant, the defendant has admitted the Work Order No. 211 dated 20.11.2019 (Ex.P-2), Work Order No. 258 dated 27.11.2019 (Ex.P-6) and Work Order No. 87 dated 28.10.2019 (Ex.P-11); and has not denied the grant of Work Order No. 355 dated 03.01.2020 (Ex.P-16), Work Order No. 335 dated 26.12.2019 (Ex.P-21), Work Order No. 259 dated 27.11.2019 (Ex.P-26), Work Order No. 13 dated 25.6.2019 (Ex.P-31) and Work Order No. 333 dated 26.12.2019 (Ex.P-36).
16. In the affidavit of admission-denial of the plaintiff's documents dated 10.12.2024 filed on behalf of the defendant, the defendant has also admitted first RA bill dated 06.10.2022 pertaining to Work Order No. 211 (Ex.P-3), first RA bill dated 24.3.2022 pertaining to Work Order No. 258 (Ex.P-8), first RA bill dated 28.7.2022 pertaining to Work Order No. 87 (Ex.P-13), first RA bill dated 30.11.2021 pertaining CS (COMM) No. 1129/2024 Page No. 20 of 61 to Work Order No. 355 (Ex.P-17), second bill dated 26.7.2023 pertaining to Work Order No. 355 (Ex.P-18), first RA bill dated 07.12.2021 pertaining to work order No. 335 (Ex.P-22), second bill dated 26.7.2023 pertaining to Work Order No. 335 (Ex.P-23), first RA bill dated 29.7.2022 pertaining to Work Order No. 259 (Ex.P-28), first RA bill dated 28.4.2020 pertaining to Work Order No. 13 (Ex.P-32), first RA bill dated 12.10.2021 pertaining to Work Order No. 333 (Ex.P-38), EOT granted by the defendant in respect of Work Order No. 258 (Ex.P-7), EOT granted by the defendant in respect of Work Order No. 87 (Ex.P-12), EOT granted by the defendant in respect of Work Order No. 259 (Ex.P-27), EOT granted by the defendant in respect of Work Order No. 333 (Ex.P-37), copy of legal notice dated 04.01.2024 sent by the plaintiff to the defendant by post and Registration Certificate of the plaintiff's firm.
17. On 12.2.2025, on the pleadings of the parties following issues were framed, namely:-
1. Whether for the contractual work done by the plaintiff at the instance of the defendant, the defendant is liable to pay ₹23,11,132/- to the plaintiff? OPP
2. Whether for non payment of ₹17,84,624/- owed by the defendant to the plaintiff, the defendant is liable to pay to the plaintiff pendente lite and future interest @ 12% per annum from 01.10.2024? OPP
3. Whether the plaintiff has committed breach of contract by CS (COMM) No. 1129/2024 Page No. 21 of 61 violating General Conditions of Contract (GCC) between the parties? OPD
4. Whether the plaintiff is not entitled to refund of the security amount due to non-compliance of clause Nos. 17 and 45 of GCC?OPD
5. Whether the suit is without any cause of action? OPD
6. Whether this court has no territorial jurisdiction to entertain the present suit? OPD
7. Whether the suit is barred under Order II Rule 3 of the Code of Civil Procedure, 1908? OPD
8. Whether the suit is bad for non service of legal notice upon the defendant? OPD
9. Whether the plaintiff is entitled to any relief, if so, what relief?
18. In support of his claim, the plaintiff got examined himself as PW1, who during his examination-in-chief tendered his affidavit Ex.PW1/A along with documents Ex.P-1 (copy of Registration Certificate dated 02.3.2022), Ex.P-2 (copy of Work Order No. EE (M- SZ-I) (EE IV)/SYS/2019-2020/211 dated 20.11.2019), Ex.P-3 (copy of the 1st bill dated 06.10.2022), Ex.P-4 (copy of letter dated 06.12.2023), Ex.P-5 (copy of final bill dated 06.12.2023 stated to have been submitted by the plaintiff), Ex.P-6 (copy of Work Order No. EE (M-SZ- I) (EE IV)/SYS/2019-2020/258 dated 27.11.2019), Ex.P-7 (copy of EOT for two months), Ex.P-8 (copy of the 1st Bill dated 24.3.2022), Ex.P-9 (copy of letter dated 07.12.2023), Ex.P-10 (copy of final bill dated CS (COMM) No. 1129/2024 Page No. 22 of 61 07.12.2023 stated to have been submitted by the plaintiff), Ex.P-11 (copy of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/87 dated 28.10.2019), Ex.P-12 (copy of EOT for two months), Ex.P-13 (copy of the 1st RA bill dated 28.7.2022), Ex.P-14 (copy of letter dated 07.12.2023), Ex.P-15 (copy of the 1st RA bill dated 30.11.2021), Ex.P-16 (copy of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 dated 03.01.2020), Ex.P-17 (copy of the 1 st RA Bill dated 07.12.2021), Ex.P-18 (copy of the 2nd RA Bill dated 29.7.2021), Ex.P-19 (copy of the letter of the MLA concerned dated 03.6.2023), Ex.P-20 (copy of letter dated 07.12.2023), Ex.P-21 (copy of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 dated 26.12.2019), Ex.P-22 (copy of 1st RA Bill dated 07.12.2021), Ex.P-23 (copy of the 2nd RA bill dated 28.8.2023), Ex.P-24 (copy of the letter of the MLA concerned dated 03.6.2023), Ex.P-25 (copy of the letter dated 07.12.2023), Ex.P-26 (copy of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/259 dated 27.11.2019), Ex.P-27 (copy of EOT for two months), Ex.P-28 (copy of 1 st RA bill dated 29.7.2022), Ex.P-29 (copy of the letter dated 07.12.2023), Ex.P-30 (copy of final bill dated 07.12.2023 stated to have been submitted by the plaintiff), Ex.P-31 (copy of Work Order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/13 dated 25.6.2019), Ex.P-32 (copy of 1st RA Bill dated 28.4.2020), Ex.P-33 (copy of the letter dated 06.12.2023), Ex.P-34 (copy of final bill dated 06.12.2023 stated to have been submitted by the plaintiff), Ex.P-35 (copy of the letter of the MLA concerned dated 16.11.2023), Ex.P-36 (copy of Work Order No. EE (M-SZ-I) (EE CS (COMM) No. 1129/2024 Page No. 23 of 61 IV)/SYS/2019-2020/333 dated 26.12.2019), Ex.P-37 (copy of EOT for three months), Ex.P-38 (copy of 1st RA Bill dated 12.10.2021), Ex.P-39 (copy of the letter dated 06.12.2023), Ex.P-40 (copy of final bill dated 06.12.2023 stated to have been submitted by the plaintiff), Ex.P-41 (copy of legal notice dated 04.01.2024 with postal receipt dated 16.01.2024) and Ex.P-42 (copy of Non-Starter Report dated 07.8.2024). PW1 Pappu Seth was cross-examined by counsel for the defendant and thereafter, evidence on behalf of the plaintiff was closed.
19. In its defence, the defendant got examined DW1 Purshottam Meena, Assistant Engineer, (M-I) (South Zone), MCD, Delhi, who during his examination-in-chief tendered his affidavit Ex.DW1/A. DW1 Purshottam Meena was cross-examined by counsel for the plaintiff and thereafter, evidence on behalf of the defendant was closed.
20. I have heard Mr. Vikas Sharma, Advocate for the plaintiff and Mr. Mohit Chaurasia, Advocate for the defendant and have gone through the material on record carefully. My issue wise findings are as follows:
Re: Issue No. 6.
21. Onus of proof qua this issue was on the defendant. No argument has been addressed on this issue by counsel for the defendant. The defendant is an incorporated local authority constituted under the Delhi Municipal Corporation Act, 1957. It is having its Head Office at Civic Centre, Minto Road, New Delhi - 110002, which is situated within the local limits of the jurisdiction of this court. As per section 20 of the CS (COMM) No. 1129/2024 Page No. 24 of 61 Code of Civil Procedure Act, 1908 (CPC), every suit shall be instituted in a Court within the local limits of whose jurisdiction the defendant at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain. As per the explanation to the said section 20, a corporation, like the defendant, shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. In the light of the provisions of section 20 of CPC this court has territorial jurisdiction to entertain the present suit, therefore, the defence of the defendant on this issue is rejected. Issue No. 6 is decided against the defendant and in favour of the plaintiff.
Re: Issue No. 7.
22. Onus of proof qua this issue was on the defendant. No argument has been addressed on this issue by counsel for the defendant. The plaintiff has instituted the present suit against the defendant for recovery of his dues in respect of eight separate work orders, namely, EE (M-SZ-I) (EE IV)/SYS/2019-2020/211 dated 20.11.2019, work order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/258 dated 27.11.2019, work order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/87 dated 28.10.2019, work order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 dated 03.01.2020, work order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 dated 26.12.2019, work order No. EE (M-SZ-I) (EE IV)/SYS/2019- 2020/259 dated 27.11.2019, work order No. EE (M-SZ-I) (EE CS (COMM) No. 1129/2024 Page No. 25 of 61 IV)/SYS/2019-2020/13 dated 25.6.2019 and work order No. EE (M-SZ- I) (EE IV)/SYS/2019-2020/333 dated 26.12.2019, awarded by the defendant in favour of the plaintiff. As per rule 1 of Order II of CPC, every suit shall as far as practicable be framed so as to afford ground for final decision upon the subjects in dispute and to prevent further litigation concerning them. As per rule 2 of Order II of CPC, Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish and portion of his claim in order to bring the suit within the jurisdiction of any Court. Further, as per rule 3 of Order II of CPC, save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit. As per rule 4 of Order II of CPC, no cause of action shall, unless with the leave of the Court, be joined with a suit for the recovery of immovable property. The claim of the plaintiff is not for recovery of immovable property, therefore, the limitations under rule 2 of Order II of CPC are not applicable in the case in hand. Therefore, the suit is not hit by any provision of Order II of CPC, therefore, the defence of the defendant on this issue is rejected. Issue No. 7 is decided against the defendant and in favour of the plaintiff.
Re: Issue No. 8.
CS (COMM) No. 1129/2024 Page No. 26 of 6123. Onus of proof qua this issue was on the defendant. No argument has been addressed on this issue by counsel for the defendant. As per the testimony of PW1 Pappu Seth and documents Ex.P-41 and Ex.P-42 before institution of the present suit the plaintiff through speed post served a notice dated 04.01.2024, a copy of which is Ex.P-41, upon the defendant. In the affidavit of admission-denial of the plaintiff's documents dated 10.12.2024 the defendant has admitted having received the notice, therefore, it cannot be said that the suit is bad for non service of legal notice upon the defendant. Issue No. 8 is decided against the defendant and in favour of the plaintiff.
Re: Issue Nos. 1, 4 and 5.
24. These three issues are inter connected, therefore, are being discussed together. The plaintiff claims that he is entitled to recover ₹4,83,834/- as security amount inclusive of earnest money along with interest after expiry of one year from the date of completion of the work orders and ₹13,00,790/- towards passed bills amount/illegally withheld amount qua the work orders, total amounting to ₹17,84,624/-, whereas according to the defendant the suit is without any cause of action and the plaintiff is not entitled to refund of security including earnest money against the work orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36 without complying with requirements of clause 45 of GCC. According to the defendant, the plaintiff has not submitted the final bills in respect of six of the work orders, namely, Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-26, Ex.P-31 and Ex.P-36, therefore, his CS (COMM) No. 1129/2024 Page No. 27 of 61 claim is premature. According to the defendant, the remaining amount cannot be released in favour of the plaintiff as he has not submitted the certificate from labour department and did not complete the work within stipulated time.
25. On these issues, the plaintiff as PW1 has reiterated the averments made in the plaint and has tendered the documents most of which have not been denied by the defendant.
26. During his cross-examination PW1 Pappu Seth deposed that he was the sole proprietor of M/s Pappu Seth and he had been working since 1981. During his cross-examination PW1 Pappu Seth further deposed that approximately 15 to 16 employees used to work with him and out of these none was engineer; and voluntarily stated that then he had stopped working in the said firm. During his cross-examination PW1 Pappu Seth further deposed that he used to supervise the operation of the said firm. During his cross-examination PW1 Pappu Seth further deposed that he had been working with the defendant corporation since 1985. During his cross-examination PW1 Pappu Seth further deposed that approximately 200 to 300 contracts might have been executed by them for the defendant corporation. During his cross-examination PW1 Pappu Seth affirmed that he had executed, signed and accepted all the terms and conditions including clause 9, 17, 45 of GCC. During his cross-examination PW1 Pappu Seth further deposed that he did not know anything about section 65B of the Indian Evidence Act. During his cross-examination PW1 Pappu Seth further deposed that as regards the CS (COMM) No. 1129/2024 Page No. 28 of 61 work order No. EE (M-SZ-I) (EE IV)/SYS/2019-2020/211 dated 20.11.2019 Ex.P-2 there was delay in executing and completing the said work order; and voluntarily stated that the work had been delayed on the part of the department as they said that new sewer line had been laid, and after that he had to start the work. During his cross-examination PW1 Pappu Seth affirmed that there was no extension of time (EOT) granted to him; and voluntarily stated that time to time provisional extension had been granted by the department itself. During his cross- examination PW1 Pappu Seth further deposed that no document (regarding extension of time) was on record. During his cross- examination PW1 Pappu Seth affirmed that Ex.P-3 was a running bill and an internal document of the defendant. During his cross-examination PW1 Pappu Seth further affirmed that in terms of clause 4 (b) of work order Ex.P-2 he was obligated to submit RA/final bill with measurement otherwise nothing would be considered due on account of work execution. During his cross-examination PW1 Pappu Seth further affirmed that by final bill dated 06.12.2023 he had sought a payment of ₹10,000/- only. During his cross-examination PW1 Pappu Seth further affirmed that in regard to the payment/dues he had not made any email or correspondence except by letter dated 06.12.2023. During his cross- examination PW1 Pappu Seth further affirmed that Ex.P-5 was a letter cum final bill dated 06.12.2023 which did not carry any measurement, photograph or details as regard the earlier payment having been made. During his cross-examination PW1 Pappu Seth further deposed that he CS (COMM) No. 1129/2024 Page No. 29 of 61 did not know if there was any clause pertaining to the interest rate to be payable on the delayed payment. During his cross-examination PW1 Pappu Seth affirmed that no communication or intimation was sent from their side to the Labour Commissioner or the defendant; and voluntarily stated that it had already been mentioned in the measurement book that there is no labour complaint. During his cross-examination PW1 Pappu Seth affirmed that the said measurement book was not part of the record; and voluntarily stated that the measurement book was with the department. During his cross-examination, as regards the work order No. EE (M-SZ-I) (EEIV)/SYS/2019-2020/258 dated 27.11.2019 Ex.P-6 PW1 Pappu Seth affirmed that Ex.P-8 was a running bill and an internal document of the defendant. During his cross-examination PW1 Pappu Seth further affirmed that in terms of clause 4 (b) of work order Ex.P-6 he was obligated to submit RA/final bill with measurement otherwise nothing would be considered due on account of work execution. During his cross-examination PW1 Pappu Seth further affirmed that by final bill Ex.P-10 dated 07.12.2023 he had sought a payment of ₹5,000/- only. During his cross-examination PW1 Pappu Seth further affirmed that in regard to the payment/dues he had not made any email or correspondence except vide letter dated 07.12.2023. During his cross- examination PW1 Pappu Seth further affirmed that that Ex.P-9 was a letter dated 07.12.2023 which did not carry any measurement, photograph or details as regard the earlier payment having been made. During his cross-examination PW1 Pappu Seth further deposed that he CS (COMM) No. 1129/2024 Page No. 30 of 61 did not know if there was any clause pertaining to the interest rate to be payable on the delayed payment. During his cross-examination PW1 Pappu Seth affirmed that no communication or intimation was sent from their side to the Labour Commissioner or the defendant; and voluntarily deposed that already it had been mentioned in the measurement book that there is no labour complaint. During his cross-examination PW1 Pappu Seth affirmed that the said measurement book was not part of the record; and voluntarily stated that measurement book was with the department. During his cross-examination, as regards the work order No. EE (M-SZ-I) (EEIV)/SYS/2019-2020/87 dated 28.10.2019 Ex.P-11 PW1 Pappu Seth affirmed that Ex.P-13 was a running bill and an internal document of the defendant. During his cross-examination PW1 Pappu Seth further affirmed that in terms of clause 4 (b) of work order Ex.P-11 he was obligated to submit RA/final bill with measurement otherwise nothing would be considered due on account of work execution. During his cross-examination PW1 Pappu Seth further affirmed that by final bill Ex.P-15 dated 07.12.2023 he had sought a payment of ₹4,000/- only. During his cross-examination PW1 Pappu Seth affirmed that in regard to the payment/dues he had not made any email or correspondence except vide letter dated 07.12.2023. During his cross-examination PW1 Pappu Seth further affirmed that Ex.P-14 was a letter dated 07.12.2023 which did not carry any measurement, photograph or details as regard the earlier payment having been made. During his cross-examination PW1 Pappu Seth further deposed that he CS (COMM) No. 1129/2024 Page No. 31 of 61 did not know if there was any clause pertaining to the interest rate to be payable on the delayed payment. During his cross-examination PW1 Pappu Seth affirmed that no communication or intimation was sent from their side to the Labour Commissioner or the defendant; and voluntarily stated that already it has been mentioned in the measurement book that there is no labour complaint. During his cross-examination PW1 Pappu Seth affirmed that the said measurement book was not the part of the record; and voluntarily stated that measurement book was with the department. During his cross-examination PW1 Pappu Seth further deposed that as regards the work order No. EE (M-SZ-I) (EEIV)/SYS/2019-2020/335 dated 26.12.2019 Ex.P-21 there was delay in executing and completing the said work order; and voluntarily stated that the work had been delayed on the part of the department as they said that new sewer line had been laid, and after that he had to start the work. During his cross-examination PW1 Pappu Seth affirmed that there was no extension of time (EOT) granted to him; and voluntarily stated that time to time provisional extension had been granted by the department itself. During his cross-examination PW1 Pappu Seth further deposed that no document (regarding extension of time) was on record. During his cross-examination PW1 Pappu Seth affirmed that Ex.P-22 was a running bill and an internal document of the defendant. During his cross- examination PW1 Pappu Seth further affirmed that in terms of clause 4
(b) of work order Ex.P-21 he was obligated to submit RA/final bill with measurement otherwise nothing would be considered due on account of CS (COMM) No. 1129/2024 Page No. 32 of 61 work execution. During his cross-examination PW1 Pappu Seth further affirmed that by letter Ex.P-25 dated 07.12.2023 he had sought a balance payment of ₹2,98,352/- and ₹67,435/- on account of security. During his cross-examination PW1 Pappu Seth affirmed that in regard to the payment/dues he had not made any email or correspondence except vide letter dated 07.12.2023. During his cross-examination PW1 Pappu Seth further affirmed that Ex.P-25 was a letter dated 07.12.2023 which did not carry any measurement, photograph or details as regard the earlier payment having been made. During his cross-examination PW1 Pappu Seth further deposed that he did not know if there was any clause pertaining to the interest rate to be payable on the delayed payment. During his cross-examination PW1 Pappu Seth affirmed that no communication or intimation was sent from their side to the Labour Commissioner or the defendant; and voluntarily stated that already it had been mentioned in the measurement book that there is no labour complaint. During his cross-examination PW1 Pappu Seth affirmed that the said measurement book was not the part of the record; and voluntarily deposed that measurement book was with the department. During his cross-examination, as regards the work order No. EE (M-SZ- I) (EEIV)/SYS/2019-2020/259 dated 27.11.2019 Ex.P-26 PW1 Pappu Seth affirmed that Ex.P-28 was a running bill and an internal document of the defendant. During his cross-examination PW1 Pappu Seth further affirmed that in terms of clause 4 (b) of work order Ex.P-26 he was obligated to submit RA/final bill with measurement otherwise nothing CS (COMM) No. 1129/2024 Page No. 33 of 61 would be considered due on account of work execution. During his cross-examination PW1 Pappu Seth further affirmed that by final bill Ex.P-30 dated 07.12.2023 he had sought a payment of ₹4000/- only. During his cross-examination PW1 Pappu Seth affirmed that in regard to the payment/dues he had not made any email or correspondence except by letter dated 07.12.2023. During his cross-examination PW1 Pappu Seth further affirmed that Ex.P-29 was a letter dated 07.12.2023 which did not carry any measurement, photograph or details as regard the earlier payment having been made. During his cross-examination PW1 Pappu Seth further deposed that he did not know if there was any clause pertaining to the interest rate to be payable on the delayed payment. During his cross-examination PW1 Pappu Seth affirmed that no communication or intimation was sent from their side to the Labour Commissioner or the defendant; and voluntarily stated that already it had been mentioned in the measurement book that there is no labour complaint. During his cross-examination PW1 Pappu Seth further affirmed that the said measurement book was not the part of the record; and voluntarily stated that measurement book was with the department. During his cross-examination PW1 Pappu Seth further deposed that as regards the work order No. EE (M-SZ-I) (EEIV)/ SYS/2019-2020/13 dated 25.6.2019 Ex.P-31 there was delay in executing and completing the above said work order; and voluntarily stated that the work had been delayed on the part of the department as they said that the new sewer line had been laid, and after that he had to start the work. During his CS (COMM) No. 1129/2024 Page No. 34 of 61 cross-examination PW1 Pappu Seth affirmed that no extension of time (EOT) was granted to him; and voluntarily stated that time to time provisional extension had been granted by the department itself. During his cross-examination PW1 Pappu Seth further deposed that no document (regarding extension of time) was on record. During his cross- examination PW1 Pappu Seth affirmed that Ex.P-32 was a running bill and an internal document of the defendant. During his cross-examination PW1 Pappu Seth further affirmed that in terms of clause 4 (b) of work order Ex.P-31 he was obligated to submit RA/final bill with measurement otherwise nothing would be considered due on account of work execution. During his cross-examination PW1 Pappu Seth further affirmed that by final bill Ex.P-34 dated 06.12.2023 he had sought a payment of ₹1,00,000/- only. During his cross-examination PW1 Pappu Seth further affirmed that in regard to the payment/dues he had not made any email or correspondence except by letter dated 06.12.2023. During his cross-examination PW1 Pappu Seth further affirmed that Ex.P-33 was a letter dated 06.12.2023 which did not carry any measurement, photograph or details as regard the earlier payment having been made. During his cross-examination PW1 Pappu Seth further deposed that he did not know if there was any clause pertaining to the interest rate to be payable on the delayed payment. During his cross-examination PW1 Pappu Seth affirmed that no communication or intimation was sent from their side to the Labour Commissioner or the defendant; and voluntarily stated that already it had been mentioned in the measurement book that CS (COMM) No. 1129/2024 Page No. 35 of 61 there is no labour complaint. During his cross-examination PW1 Pappu Seth further affirmed that the said measurement book was not the part of the record; and voluntarily stated that measurement book was with the department. During his cross-examination PW1 Pappu Seth further affirmed that as regard the two work orders Ex.P-16 and Ex.P-36, bearing numbers EE (M-SZ-I) (EE IV)/SYS/2019-2020/355 and EE (M- SZ-I) (EE IV)/SYS/2019-2020/333 respectively dated 03.01.2020 and 26.12.2019 respectively passed bill amounts had been paid by the defendant.
27. DW1 Purshottam Meena during his examination-in-chief deposed that he was working as Assistant Engineer, M-I, South Zone and was authorised to depose in the present matter. DW1 Purshottam Meena further deposed that at the time of issuance of work orders there were specific conditions agreed to by the plaintiff with respect to the payment to be made to the contractor after completion of the work. DW1 Purshottam Meena further deposed that the final bill should be submitted by the contractor in the same manner as specified in interim bills within three months of physical completion of the work or within one month of the date of the final certificate completion furnished by the Engineer-in- Chief, whichever was earlier. DW1 Purshottam Meena further deposed that the plaintiff had failed till that day to submit such final bill in some cases. DW1 Purshottam Meena further deposed that he had only furnished a copy of 1st bill signed by the EE, subsequent to which a proper final bill was to be submitted along with photograph, CS (COMM) No. 1129/2024 Page No. 36 of 61 measurement, interim bill and also the labour certificate in order to claim security dues in terms of clause 45 of GCC. DW1 Purshottam Meena further deposed that the plaintiff has failed to fulfill the condition contained in clause 4 of the work order as well as clause 9, 17 and 45 of GCC duly accepted by the plaintiff, therefore, the plaintiff was not entitled to payment of its due unless the final bill was submitted with measurement, photograph, interim bill and labour certificate etc. DW1 Purshottam Meena further deposed that payment of ₹3,21,192/- qua work order No. 355 dated 03.01.2019 and payments of ₹2,98,352/-work order No. 335 dated 25.12.2019 had already been made to the plaintiff. DW1 Purshottam Meena further deposed that security for the above said work orders could not be released due to five years maintenance period in head of account MSPY which was already mentioned in NIT conditions and sanction letter issued from UD Department, GNCTD. DW1 Purshottam Meena further deposed that the plaintiff is not entitled to any interest as the same is not due or payable because of the reason of non-submission of final bill in due format and procedures.
28. During his cross-examination DW1 Purshottam Meena affirmed that the plaintiff completed the work of orders Ex.P2, Ex.P6, Ex.P11, Ex.P16, Ex.P21, Ex.P26, Ex.P31 and Ex.P39 as awarded to him. During his cross-examination DW1 Purshottam Meena further affirmed that the department also prepared and passed the running bills qua the work orders Ex.P2, Ex.P6, Ex.P11, Ex.P16, Ex.P21, Ex.P26, Ex.P31 and Ex.P39. During his cross-examination DW1 Purshottam Meena further CS (COMM) No. 1129/2024 Page No. 37 of 61 affirmed that the defendant department also made part payments of the bills as prepared and passed by the department. During his cross- examination DW1 Purshottam Meena further affirmed that no letter was ever written by the defendant asking the plaintiff for submission of any labour clearance certificate or report. During his cross-examination DW1 Purshottam Meena further deposed that he had seen letter Ex.P4, final bill Ex.P5, letter Ex.P9, final bill Ex.P10, letter Ex.P14, final bill Ex.P15, letter Ex.P20, letter Ex.P25, letter Ex.P29, final bill Ex.P30, letter Ex.P33, final bill Ex.P34, letter Ex.P39 and final Ex.P40 in the court record.
29. From the statements made in the written statement and the testimony of DW1 Purshottam Meena it has been proved that the plaintiff had completed the work under orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36 as awarded to him; and the defendant also prepared and passed the running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-18, Ex.P-22, Ex.P-23, Ex.P-28, Ex.P-32 and Ex.P-38 qua the work orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36 without raising any objection against the defendant. From the statements made in the written statement and the testimony of DW1 Purshottam Meena it has also been proved that the defendant also made part payments of the bills as prepared and passed by its employees.
30. According to the plaintiff, in respect of Work Order Ex.P-2 bearing No. 211, first running bill Ex.P-3 in the sum of ₹11,32,068/-
CS (COMM) No. 1129/2024 Page No. 38 of 61was passed by the defendant on 06.10.2022; and in connection with the said work order the defendant withheld ₹10,000/- from the amount due to the plaintiff, and it is also liable to release the security amount, inclusive of earnest money in the sum of ₹1,13,207/-. Further, according to the plaintiff, in respect of Work Order Ex.P-6 bearing No. 258, first running bill Ex.P-8 in the sum of ₹4,25,945/- was passed by the defendant on 24.3.2022; and in connection with the said work order the defendant withheld ₹5,000/- from the amount due to the plaintiff, and it is also liable to release the security amount, inclusive of earnest money, in the sum of ₹42,595/-. The plaintiff also claims that in respect of Work Order Ex.P-11 bearing No. 87, first running bill Ex.P-13 in the sum of ₹4,32,271/- was passed by the defendant on 28.7.2022; and in connection with the said bill the defendant withheld ₹4,000/- from the amount due to the plaintiff, and it is also liable to release the security amount, inclusive of earnest money, in the sum of ₹43,227/-. The plaintiff also claims that in respect of Work Order Ex.P-16 bearing No. 355, first running bill Ex.P-17 in the sum of ₹7,25,192/- and second bill Ex.P-18 in the sum of ₹5,000/- were passed by the defendant on 30.11.2021 and 28.7.2023 respectively; and in connection with the first running bill the defendant is liable to release the security amount, inclusive of earnest money, in the sum of ₹72,719/-. The plaintiff also claims that in respect of Work Order Ex.P-21 bearing No. 335, first running bill Ex.P-2 in the sum of ₹6,74,352/- and second bill Ex.P-23 in the sum of ₹5,000/- were passed by the defendant on 07.12.2021 and CS (COMM) No. 1129/2024 Page No. 39 of 61 28.7.2023 respectively; and in connection with the first running bill the defendant is liable to release the security amount, inclusive of earnest money, in the sum of ₹67,435/-. The plaintiff also claims that in respect of Work Order Ex.P-26 bearing No. 259, first running bill Ex.P-28 in the sum of ₹4,25,082/- was passed by the defendant on 29.7.2022; and in connection with the said bill the defendant withheld ₹4,000/- from the amount due to the plaintiff, and it is also liable to release the security amount, inclusive of earnest money, in the sum of ₹42,509/-. The plaintiff also claims that in respect of Work Order Ex.P-31 bearing No. 13, first running bill Ex.P-32 in the sum of ₹4,15,068/- was passed by the defendant on 28.4.2020; and in connection with the said bill the defendant withheld ₹1,00,000/- from the amount due to the plaintiff, and it is also liable to release the security amount, inclusive of earnest money, in the sum of ₹41,507/-. The plaintiff also claims that in respect of Work Order Ex.P-36 bearing No. 333, first running bill Ex.P-38 in the sum of ₹6,06,356/- was passed by the defendant on 12.10.2021; and in connection with the said bill the defendant withheld ₹20,000/- from the amount due to the plaintiff, and it is also liable to release the security amount, inclusive of earnest money, in the sum of ₹60,636/-. And thus, according to the plaintiff, for the work done pursuant to work orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36, and the running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32, and Ex.P-38, prepared by the officials of the defendant and accepted by the plaintiff under his signatures, the CS (COMM) No. 1129/2024 Page No. 40 of 61 defendant is liable to release the withheld money in the sum of ₹1,43,000/-, to refund the security deposit, inclusive earnest money, in the sum of ₹4,83,834/- and to pay the sum of ₹11,57,790/- on account of remaining amount.
31. According to the defendant, although the running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38, in connection with the work order Nos. 211, 258, 87, 355, 335, 259, 13 and 333 respectively, dated 06.10.2022, 24.3.2022, 28.7.2022, 30.11.2021, 07.12.2021, 29.7.2022, 28.4.2020 and 12.10.2021 respectively were prepared by the officials of the defendant, and signed by the plaintiff to signify his acceptance, and the figures mentioned therein are not in dispute, still the defendant is not liable to pay the amount mentioned therein to the plaintiff, because the plaintiff in compliance of clause 9 of GCC did not submit final bills to the defendant as he was required to do. According to the defendant, it was obligatory upon the plaintiff to submit the final bills in respect of each work order which were never submitted in respect of some work orders, therefore, the suit is without any cause of action. According to the defendant, passed running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38 are only internal notings of the office of the defendant which do not give rise to any liability against the defendant.
32. It has been held by the Hon'ble Delhi High Court in Surgical Electronics v. Union of India, 60 (1995) DLT 359 that the CS (COMM) No. 1129/2024 Page No. 41 of 61 internal notings are only an expression of views during the decision making process and cannot be treated as binding and enforceable decision.
33. It has been held by the Hon'ble Supreme Court in M/s. Sethi Auto Service Station v. Delhi Development Authority, (2009) 1 SCC 180 that notings in a departmental file do not have the sanction of law to be an effective order which is only an expression of viewpoint or opinion of an officer to be used for internal use and consideration of other officials of department and helps in arriving at final decision. Such type of internal notings is not meant for outside exposure. When such notings is approved by the final decision making authority and that order is communicated to the concerned party whose rights are affected, then only the same can be considered.
34. The running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38, passed on 06.10.2022, 24.3.2022, 28.7.2022, 30.11.2021, 07.12.2021, 29.7.2022, 28.4.2020 and 12.10.2021 respectively have been accepted by the plaintiff and are bearing signatures of the plaintiff as their acceptance by him, and have been approved by competent officers of the defendant, for part payments have been made in respect of the said bills to the plaintiff. As per the contents of Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38, the entries in the said running bills are based upon the measurement books which contain details and particulars of work done on day to day basis that are cross checked by the officials of the CS (COMM) No. 1129/2024 Page No. 42 of 61 defendant after physical verification at the site. In these circumstances running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32, and Ex.P-38 cannot be termed as mere internal notings or internal communication of the defendant from one office to another because their contents were fully brought into the knowledge of the plaintiff and the entries therein were got confirmed from him who signed the same without any objection. Hence, the defence taken by the defendant that running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32, and Ex.P-38 are only internal notings cannot be accepted.
35. At the strength of judgment dated 22.3.20218 rendered by the Hon'ble Delhi High Court in in RFA 430/2017 entitled East Delhi Municipal Corporation v. Sanjeev Kumar it is submitted by counsel for the defendant that it was required on the part of the plaintiff to submit final bills before raising his claim against the defendant, and therefore, running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38 as prepared by the officials of the defendant cannot be treated as proper compliance of the directions passed in Sanjeev Kumar's case (supra). And thus, when no final bills are submitted by the plaintiff, he is not entitled to lay any claim against the defendant.
36. Law does not require that the final bill raised by a contractor should be in a particular form or in the handwriting of such contractor. Acceptance of bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38, prepared by the officers of the CS (COMM) No. 1129/2024 Page No. 43 of 61 defendant, by the plaintiff by putting his signatures thereon itself is sufficient to hold that those bills were submitted by him. Mere fact that particulars in running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38 have been filled up by some official or officials of the defendant in order to help or assist the plaintiff in its preparation itself is not sufficient to reject the same. Signatures of PW1 Pappu Seth on Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38 are sufficient to hold that those were submitted by the plaintiff himself, and further from the approval given by the officials of the defendant on the same leads to the inference that there is proper compliance of Sanjeev Kumar's case (supra).
37. Further, in Sanjeev Kumar's case (supra) the Hon'ble High Court has passed following guidelines, namely:-
1. Along with the work order, all the Clauses of the General Conditions of Contract should be attached;
2. On the award of the Work order, periodic inspections of the work being carried out should be done by the Engineer-in-Charge;
3. If possible, photographs of the works at different stages should be taken and maintained on the record;
4. Interim bills should be submitted by the Contractor - duly certifying the work which has been carried out;
5. Final bills should be submitted by the Contractor - duly certifying the work carried out along with photographs;
6. The Bill should be scrutinised by the Engineer-in-Charge, works should be recorded in the measurement book and thereafter, the bill should be passed;
7. Once the Bill is passed, the payment schedule of 6 months and 9 months should be adhered to. Delay in payments would result in Interest being levied;
8. For refunds of Security deposit and Earnest Money deposit, the Contractor should unscrupulously comply with the conditions in Clauses 17 and 45. For refunds to be made, payment of final bill need not be CS (COMM) No. 1129/2024 Page No. 44 of 61 awaited. Once the conditions of Clauses 17 and 45 are complied with and the final bill is passed, refunds ought to be made;
9. In suits relating to recovery of Contractor‟s dues, all the evidence including the NIT, General Conditions of Contract, periodic inspection reports, Final bill as submitted, Final bill as passed, Measurements carried out, Photographs etc., should be produced and duly exhibited.
10. IT infrastructure ought to be created to maintain records of the work orders, inspection reports, final bills, photographs etc., digitally, as it is noticed that the trial court record does not contain all the relevant documents and in several cases, different versions of clauses are relied upon by both sides, bills are not properly understandable and there is no evidence of actual inspections or measurements having been taken.
Maintenance of digital records will make it more transparent and easily accessible for the officials and for production in the Court in case of future litigation.
There is no material before this court to show that the defendant itself has complied with those guidelines. The defendant has not filed any document in support of its defence, including NIT, General Conditions of Contract, periodic inspection reports, measurements carried out, photographs etc pertaining to the work done by the plaintiff. In such scenario, blaming the plaintiff only for alleged non compliance of directions of the Hon'ble High Court in Sanjeev Kumar's case (supra), and avoiding to comply with the same by itself is not justified act on the part of defendant. Accordingly, it is held that running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32 and Ex.P-38 were deemed to have been duly submitted by the plaintiff in terms of the directions given in Sanjeev Kumar's case (supra) and suit is not without cause of action as alleged by defendant.
38. As per the contents of running bill Ex.P-3 pertaining to Work Order No. 211, passed on 06.10.2022 and signed by PW1 Pappu CS (COMM) No. 1129/2024 Page No. 45 of 61 Seth and the officials of the defendant, as on 06.10.2022 net amount payable to the plaintiff under Work Order Ex.P-2 was ₹11,32,068/-, Admittedly, out of the said sum of ₹11,32,068/- the plaintiff has received ₹7,63,889/- from the defendant on 31.10.2022; and by way of the present suit the plaintiff is claiming balance amount of ₹2,24,068/- under bill Ex.P-3 in respect of Work Order No. 211. As per Ex.P-3, while preparing the said bill the defendant also withheld a sum of ₹10,000/- from the amount due to the plaintiff, and further, a sum of ₹1,13,207/- belonging to the plaintiff, in connection with the said work order is lying with the defendant as security deposit inclusive of earnest money of ₹35,700/-.
39. As per the contents of running bill Ex.P-8 pertaining to Work Order No. 258, passed on 24.3.2022 and signed by PW1 Pappu Seth and the officials of the defendant, as on 24.3.2022 net amount payable to the plaintiff under the said work order was ₹4,25,945/-, Admittedly, out of the said sum of ₹4,25,945/- the plaintiff has received ₹1,61,809/- from the defendant on 31.3.2022; and by way of the present suit the plaintiff is claiming balance amount of ₹2,03,945/- under bill Ex.P-8 in respect of work order No. 258. As per Ex.P-8, while preparing the said bill the defendant also withheld a sum of ₹5,000/- from the amount due to the plaintiff, and further, a sum of ₹42,595/- belonging to the plaintiff, in connection with the said work order is lying with the defendant as security deposit inclusive of earnest money of ₹8,700/-.
40. As per the contents of running bill Ex.P-13 pertaining to CS (COMM) No. 1129/2024 Page No. 46 of 61 Work Order No. 87, passed on 28.7.2022 and signed by PW1 Pappu Seth and the officials of the defendant, as on 28.7.2022 net amount payable to the plaintiff under the said work order was ₹4,32,271/-, Admittedly, out of the said sum of ₹4,32,271/- the plaintiff has received ₹1,60,859/- from the defendant on 26.8.2022; and by way of the present suit the plaintiff is claiming balance amount of ₹2,11,271/- under bill Ex.P-13 in respect of Work Order No. 87. As per Ex.P-13, while preparing the said bill the defendant also withheld a sum of ₹4,000/- from the amount due to the plaintiff, and further, a sum of ₹43,227 /- belonging to the plaintiff, in connection with the said work order is lying with the defendant as security deposit inclusive of earnest money of ₹8,700/-.
41. As per the contents of running bill Ex.P-17 pertaining to Work Order No. 355, passed on 30.11.2021 and signed by PW1 Pappu Seth and the officials of the defendant, as on 30.11.2021 net amount payable to the plaintiff under the said Work Order was ₹7,25,192/-, Admittedly, out of the said sum of Rs.7,25,192/- the plaintiff has received ₹6,27,413/- from the defendant in two installments of ₹3,11,221/- and ₹3,21,192/- on 13.12.2021 and 13.3.2024 respectively. As per Ex.P-17, a sum of ₹72,719/- belonging to the plaintiff, in connection with Work Order No. 355 is lying with the defendant as security deposit inclusive of earnest money of ₹16,200/-.
42. As per the contents of running bill Ex.P-22 pertaining to Work Order No. 335, passed on 07.12.2021 and signed by PW1 Pappu Seth and the officials of the defendant, as on 07.12.2021 net amount CS (COMM) No. 1129/2024 Page No. 47 of 61 payable to the plaintiff under the said Work Order was ₹6,74,352/-, Admittedly, out of the said sum of ₹6,74,352/- the plaintiff has received ₹5,83,248/- from the defendant in two installments of ₹2,89,896/- and ₹2,98,352/- on 10.01.2022 and 13.3.2024 respectively. As per Ex.P-22, in connection with Work Order No. 335 a sum of ₹67,435/-, belonging to the plaintiff, is lying with the defendant as security deposit inclusive of earnest money of ₹15,050/-.
43. As per the contents of running bill Ex.P-28 pertaining to Work Order No. 259, passed on 29.7.2022 and signed by PW1 Pappu Seth and the officials of the defendant, as on 29.7.2022 net amount payable to the plaintiff under the said Work Order was ₹4,25,082/-, Admittedly, out of the said sum of ₹4,25,082/- the plaintiff has received ₹1,61,937/- from the defendant on 26.8.2022; and by way of the present suit the plaintiff is claiming balance amount of ₹2,04,082/- under bill Ex.P-28 in respect of Work Order No. 259. As per Ex.P-28, while preparing the said bill the defendant also withheld a sum of ₹4,000/- from the amount due to the plaintiff, and further, a sum of ₹42,508/- belonging to the plaintiff, in connection with the said Work Order is lying with the defendant as security deposit inclusive of earnest money of ₹8,700/-.
44. As per the contents of running bill Ex.P-32 pertaining to Work Order No. 13, passed on 28.4.2020 and signed by PW1 Pappu Seth and the officials of the defendant, as on 28.4.2020 net amount payable to the plaintiff under the said Work Order was ₹4,15,068/-, Admittedly, out CS (COMM) No. 1129/2024 Page No. 48 of 61 of the said sum of ₹4,15,068/- the plaintiff has received ₹2,00,413/- from the defendant on 01.6.2020; and by way of the present suit the plaintiff is claiming balance amount of ₹66,068/- under bill Ex.P-32 in respect of work order No. 13. As per Ex.P-32, while preparing the said bill the defendant also withheld a sum of ₹1,00,000/- from the amount due to the plaintiff, and further, a sum of ₹41,507/- belonging to the plaintiff, in connection with the said Work Order was lying with the defendant as security deposit inclusive of earnest money of ₹11,450/-.
45. As per the contents of running bill Ex.P-38 pertaining to Work Order No. 333, passed on 12.10.2021 and signed by PW1 Pappu Seth and the officials of the defendant, as on 12.10.2021 net amount payable to the plaintiff under the said Work Order was ₹6,06,356/-, Admittedly, out of the said sum of ₹6,06,356/- the plaintiff has received ₹2,60,595/- from the defendant on 29.10.2021; and by way of the present suit the plaintiff is claiming balance amount of ₹2,48,356/- under bill Ex.P-38 in respect of work order No. 333. As per Ex.P-38, while preparing the said bill the defendant also withheld a sum of ₹20,000/- from the amount due to the plaintiff, and further, a sum of ₹60,636/- belonging to the plaintiff, in connection with the said work order was lying with the defendant as security deposit inclusive of earnest money of ₹13,550/-.
46. Under clause 9 of GCC if the bill amount is of five lakh rupees or more, then the defendant can take nine months time to make its payment otherwise it has six months time to release the payment.
CS (COMM) No. 1129/2024 Page No. 49 of 61This fact is not in dispute that payment is to be released only by the defendant, and its officials only verify and pass the bills and send to account department at headquarters for release of payment. Since the running bills Ex.P-3, Ex.P-17, Ex.P-22 and Ex.P-38 are for ₹11,32,068/-, ₹7,25,192/-, ₹6,74,352/- and ₹6,06,356/- respectively, which are more than five lakh rupees and passed on 06.10.2022, 30.11.2021, 07.12.2021 and 12.10.2021 respectively, therefore, the defendant had time of nine months to make the payment, that is by 06.7.2023, 30.8.2022, 07.9.2022 and 12.7.2022 respectively. Similarly, the running bills Ex.P-8, Ex.P-13, Ex.P-28 and Ex.P-32 are for ₹4,25,945/-, ₹4,32,271/-, ₹4,25,082/- and ₹4,15,068/- respectively, which are less than five lakh rupees and passed on 24.3.2022, 28.7.2022, 29.7.2022 and 28.4.2020 respectively, therefore, the defendant had time of six months to make the payment, that is by 24.9.2022, 28.01.2023, 29.01.2023 and 28.10.2020 respectively. In the case in hand despite passing of more than nine months in respect of running bills Ex.P-3, Ex.P-17, Ex.P-22 and Ex.P-38 and more than six months in respect of running bills Ex.P-8, Ex.P-13, Ex.P-28 and Ex.P-32 the defendant has not made payment of the balance amount admitted in the said bills, therefore, the plaintiff is found entitled to recover ₹2,24,068/- in respect of Work Order No. 211, ₹2,03,945/- in respect of Work Order No. 258, ₹2,11,271/- in respect of Work Order No. 87, ₹2,04,082/- in respect of Work Order No. 259, ₹66,068/- in respect of Work Order No. 13 and ₹2,48,356/- in respect of Work Order No. 333 under running bills CS (COMM) No. 1129/2024 Page No. 50 of 61 Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-28, Ex.P-32 and Ex.P-38 respectively.
47. By way of the suit the plaintiff is also claiming ₹10,000/- as withheld amount in respect of Work Order No. 211, ₹5,000/- in respect of Work Order No. 258, ₹4,000/- in respect of Work Order No. 87, ₹4,000/- in respect of Work Order No. 259, ₹1,00,000/- in respect of Work Order No. 13 and ₹20,000/- in respect of Work Order No. 333. The said amount was withheld by the defendant at the time of preparation of running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-28, Ex.P-32 and Ex.P-38 on 06.10.2022, 24.3.2022, 28.7.2022, 29.7.2022, 28.4.2020 and 12.10.2021, and in the written statement no justification has been given by the defendant regarding withholding the said amount except the assertion that the said money is withheld due to non-submission of certain formalities that the plaintiff was liable to complete in terms of GCC as well as other work order conditions and are to be released in accordance with clause 17 and 45 of GCC. As per the testimony of DW1 Purshottam Meena there is no complaint regarding quality against the plaintiff in respect of work orders Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-28, Ex.P-32, and Ex.P-38. In these circumstances, in the considered opinion of the court, the defendant are liable to pay the withheld sum of ₹1,43,000/- to the plaintiff as claimed by the plaintiff against the defendant.
48. The plaintiff is also claiming the sum of ₹1,13,207/- as refund of security deposit inclusive of earnest money in connection with work order No. 211, a sum of ₹42,595/- as refund of security deposit CS (COMM) No. 1129/2024 Page No. 51 of 61 inclusive of earnest money in connection with work order No. 258, a sum of ₹43,227/- as refund of security deposit inclusive of earnest money in connection with work order No. 87, a sum of ₹72,719/- as refund of security deposit inclusive of earnest money in connection with work order No. 355, a sum of ₹67,435/- as refund of security deposit inclusive of earnest money in connection with work order No. 335, a sum of ₹42,508/- as refund of security deposit inclusive of earnest money in connection with work order No. 259, a sum of ₹41,507/- as refund of security deposit inclusive of earnest money in connection with work order No. 13, and a sum of ₹60,636/- as refund of security deposit inclusive of earnest money in connection with work order No. 333. In the written statement the defendant has not denied that the said amount is lying with it, and in running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32, and Ex.P-38 it is duly reflected that in connection with work orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36 the amount of ₹4,83,834/- is lying deposited with the defendant. At the strength of clause 17 and clause 45 of GCC the contention of the defendant, however, is that the said money cannot be refunded to the plaintiff as Clearance Certificates have not been submitted by the plaintiff from the Labour Department.
49. The work under the eight work orders was completed by the plaintiff without any complaint and upto the satisfaction of the defendant, therefore, the plaintiff becomes eligible for release of security money after one year period because clause 17 of GCC permits the CS (COMM) No. 1129/2024 Page No. 52 of 61 plaintiff to claim refund of the security money after the expiry of one year period from the date of completion of work or from the date of passing of final bill, whichever is later. Period of both the situations in the present case has already expired due to lapse of one year from the date of completion of the work as well as passing of final bill 06.10.2022, 24.3.2022, 28.7.2022, 30.11.2021, 07.12.2021, 29.7.2022, 28.4.2020 and 12.10.2021, therefore, the plaintiff is entitled to have refund of his security money under the eight work orders from the defendant. No bar of any condition of clause 17 applies in the present situation.
50. In its judgment dated 10.01.2023 passed in RFA(OS) (COMM) 1/2021 entitled Rajnish Yadav proprietor of M/s Bharat Construction Co. v. The North Delhi Municipal Corporation while dealing with the similar question regarding refund of security deposit the Hon'ble Delhi High Court, inter alia, held as follows:
24. Insofar as the appellant's / plaintiff's claim for refund of the security deposit is concerned, it was admitted that MCD had deducted a sum of Rs.27,88,530/- from the amounts payable under the RA Bills furnished by the appellant / plaintiff. The amounts retained by MCD are admittedly refundable to the appellant / plaintiff. It was MCD's case that the appellant / plaintiff was required to complete certain formalities including production of certain certificates regarding clearance of labour dues for claiming a refund of the said amount. The learned Single Judge held that since the appellant / plaintiff had not completed the requisite formalities, he was not entitled to a refund of the said amount.
25. This Court is unable to concur with the said decision of the learned Single Judge. There is no dispute that the security deposit is refundable to the appellant / plaintiff and the same could be withheld only to secure MCD against any claims due to non-performance of the CS (COMM) No. 1129/2024 Page No. 53 of 61 statutory obligations on the part of the appellant / plaintiff. There is no material to indicate that the appellant / plaintiff has not cleared its dues towards labour or any other statutory levy. A considerable amount of time has lapsed since the contract was completed. Admittedly, no claim has been made against MCD on account of any acts of commission or omission on the part of the appellant / plaintiff.
Denying the appellant's / plaintiff's claim in this context would amount to permitting MCD to appropriate the security amount. Admittedly, there are no grounds for MCD to appropriate the security deposit. Thus, the same is required to be refunded to the appellant / plaintiff.
51. There is no evidence on record to suggest that there was any complaint regarding labour dispute against the plaintiff in respect of the work orders in question. During his cross-examination when DW1 Purshottam Meena was asked about pendency of any labour complaint against the plaintiff, he answered that the labour complaint did not come to department. As already mentioned after conclusion of work in the present case running bills were prepared on 06.10.2022, 24.3.2022, 28.7.2022, 30.11.2021, 07.12.2021, 29.7.2022, 28.4.2020 and 12.10.2021 and since then more than two years have passed, and as per the testimony of DW1 Purshottam Meena there is no complaint against the plaintiff regarding labour dispute. In such circumstances in the light of law laid down by the Hon'ble Delhi High Court in Rajnish Yadav's case (supra) there is no merit in the contention of the plaintiff that since clearance certificate from the Labour office has not been submitted by the plaintiff he is not entitled for refund of the security. Since there is no complaint against the plaintiff with the Labour Commissioner, therefore, the plaintiff is entitled for refund of security in the sum of ₹4,83,834/-. In view of the law laid down by the Hon'ble Delhi High Court in North CS (COMM) No. 1129/2024 Page No. 54 of 61 Delhi Municipal Corporation v. M/s R.K. Goel Abhay Kumar Jain, AirOnline 2021 Delhi 1057, however, he is not entitled for any interest on the said security amount for the period prior to the institution of the present suit.
52. The questions regarding the balance amount payable by the defendant to the plaintiff under bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-22, Ex.P-28, Ex.P-32, and Ex.P-38, withheld money in the sum of ₹1,43,000/- in respect of each of the work orders payable by the defendant to the plaintiff, and the security amount in respect of eight work orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36 having been thus determined, the next question needs answer is regarding the interest payable to the plaintiff by the defendant for the period prior to the institution of the suit as claimed in the plaint.
53. In the plaint, the plaintiff has claimed a sum of ₹5,26,508/- as interest for the period prior to the institution of the suit, and such interest at the rate of 12% per annum has been calculated in the following manner, namely:
i. Interest at the rate of 12% from 06.10.2023 till 30.9.2024 on Rs.1,13,207 (361 days) (security amount due under WO No. 211 Rs.13,435/-
ii. Interest at the rate of 12% from 06.10.2022 till 30.9.2024 on Rs.2,34,068/- (726 days) (bill + withheld amount due under WO No. 211 Rs.55,868/-
CS (COMM) No. 1129/2024 Page No. 55 of 61iii. Interest at the rate of 12% from 05.10.2022 till 30.9.2024 on Rs.42,595/- (727 days) (security amount due under WO No. 258 Rs.10,180/-
iv. Interest at the rate of 12% from 24.3.2022 till 30.9.2024 on Rs.2,05,945/- (892 days) (bill + withheld amount due under WO No. 258 Rs.60,395/- v. Interest at the rate of 12% from 10.9.2022 till 30.9.2024 on Rs.43,227/- (752 days) (security amount due under WO No. 87 Rs.10,687/-
vi. Interest at the rate of 12% from 28.7.2022 till 30.9.2024 on Rs.2,15,271/- (796 days) (bill + withheld amount due under WO No. 87 Rs.56,336/- vii. Interest at the rate of 12% from 15.9.2022 till 30.9.2024 on Rs.72,719/- (747 days) (security amount due under WO No. 355 Rs.17,858/-
viii. Interest at the rate of 12% from 26.8.2022 till 30.9.2024 on Rs.67,435/- (767 days) (security amount due under WO No. 355 Rs.17,004/-
ix. Interest at the rate of 12% from 04.9.2022 till 30.9.2024 on Rs.42,508/- (758 days) (security amount due under WO No. 259 Rs.10,593/-
x. Interest at the rate of 12% from 29.7.2022 till 30.9.2024 on Rs.2,08,082/- (795 days) (bill + withheld amount due under WO No. 259 Rs.54,386/-
CS (COMM) No. 1129/2024 Page No. 56 of 61xi. Interest at the rate of 12% from 03.10.2020 till 30.9.2024 on Rs.41,507/- (1459 days) (security amount due under WO No. 13 Rs.19,909/-
xii. Interest at the rate of 12% from 28.4.2020 till 30.9.2024 on Rs.1,66,068/- (1617 days) (bill + withheld amount due under WO No. 13 Rs.88,284/- xiii. Interest at the rate of 12% from 29.7.2022 till 30.9.2024 on Rs.60,636/- (795 days) (security amount due under WO No. 333 Rs.15,848/-
xiv. Interest at the rate of 12% from 12.10.2021 till 30.9.2024 on Rs.2,68,356/- (1085 days) (bill + withheld amount due under WO No. 333 Rs.95,725/- The said sum of ₹5,26,508/- also includes ₹1,15,914/- as interest on security amount. As discussed above, in view of the law laid down in M/s R.K. Goel Abhay Kumar Jain's case (supra) the plaintiff is a not entitled to any interest on the security amount for any period prior to the institution of the suit.
54. As per the record, the defendant's liability to pay in respect of running bills Ex.P-3, Ex.P-17, Ex.P-22 and Ex.P-38 had started with effect from 06.7.2023, 30.8.2022, 07.9.2022 and 12.7.2022 respectively, after taking mandatory period of nine months, whereas qua its liability to pay qua running bill Ex.P-8, Ex.P-13, Ex.P-28 and Ex.P-32 had started with effect from 06.01.2024, 30.02.2023, 07.3.2023 and 12.01.2023 respectively, after taking period of six months under Clause 7 and 9 of CS (COMM) No. 1129/2024 Page No. 57 of 61 GCC. The plaintiff, however, has claimed interest from 06.10.2022 to 30.9.2024 in respect of Work Order No. 211, from 05.10.2022 to 30.9.2024 in respect of Work Order No. 258, from 28.7.2022 to 30.9.2024 in respect of Work Order No. 87, from 29.7.2022 to 30.9.2024 in respect of Work Order No. 259, from 28.4.2020 to 30.9.2024 in respect of Work Order No. 13 and from 12.10.2021 to 30.9.2024 in respect of Work Order No. 333 and thus, he has waived the interest from 01.10.2024 till institution in respect of bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-28, Ex.P-32 and Ex.P-38.
55. As per GCC, the defendant could make payment of passed bill within six or nine months as the case may be without payment of any interest, but thereafter it is liable to pay the bill amount with interest. On the point of the rate of the interest, in Rajnish Yadav's case (supra) the Hon'ble Delhi High Court in similar facts and circumstances of the view that simple interest at the rate of 9% per annum would be reasonable.
56. In the present case, in the light of judgment passed in Rajnish Yadav's case (supra), in the opinion of the court, interest at the rate of 9% per annum will be reasonable interest for delayed period. However, in view of M/s R.K. Goel Abhay Kumar Jain's case (supra) the defendant is not liable to pay any interest on the security amount for the period prior to the institution of the suit. Therefore, the defendant is directed to pay interest at the rate of 9% per annum on ₹2,34,068/- for the period 06.7.2023 till 30.9.2024, interest at the rate of 9% per annum CS (COMM) No. 1129/2024 Page No. 58 of 61 on ₹2,08,945/- for the period 24.9.2022 till 30.9.2024, interest at the rate of 9% per annum on ₹2,15,271/- for the period 28.01.2023 till 30.9.2024, interest at the rate of 9% per annum on ₹2,08,082/- for the period 29.01.2023 till 30.9.2024, interest at the rate of 9% per annum on ₹1,66,068/- for the period 28.10.2020 till 30.9.2024 and interest at the rate of 9% per annum on ₹2,68,356/- for the period 12.7.2022 till 30.9.2024. Issues No. 1, 4 and 5 are answered accordingly. Re: Issue No. 2.
57. The plaintiff is seeking pendente lite and future interest at the rate of 12% per annum on ₹17,84,624/- from the date of institution of the suit. By way of this suit the plaintiff has been found entitled to recover the said sum of ₹17,84,624/- from the defendant as principal amount. Therefore, in the light of judgment passed in Rajnish Yadav's case (supra) the plaintiff is found entitled to interest at the rate of 9% per annum from the date of the institution of the suit on the sum of ₹17,84,624/- till payment by the defendant. The issue No. 2 is decided accordingly.
Re: Issue No. 3.
58. Onus of proof qua this issue was on the defendant. As per the evidence led by the parties, after placement of work orders Ex.P-2, Ex.P-6, Ex.P-11, Ex.P-16, Ex.P-21, Ex.P-26, Ex.P-31 and Ex.P-36 by the defendant with the plaintiff, the plaintiff executed the work without any complaint. After performing his part of the contracts the plaintiff became entitled to the amount due under the said contracts from the CS (COMM) No. 1129/2024 Page No. 59 of 61 defendant. Before submission of the final bills by the plaintiff to the defendant, the officials of the defendant themselves had prepared the running bills Ex.P-3, Ex.P-8, Ex.P-13, Ex.P-17, Ex.P-18, Ex.P-22, Ex.P-23, Ex.P-28, Ex.P-32 and Ex.P-38, and got the signatures of the plaintiff as his approval. In these circumstances it cannot be said that the plaintiff committed any breach of contract. The issue No. 3 is decided in favour of the plaintiff.
Relief
59. In view of the above discussions, the suit is partly decreed with full costs. It is ordered that in respect of work orders Ex.P-2 (211), Ex.P-6 (258), Ex.P-11(87), Ex.P-16 (355), Ex.P-21(335), Ex.P-26 (259), Ex.P-31(13) and Ex.P-36 (333) the plaintiff is entitled to recover from the defendant only a sum of ₹17,84,624/- as principal amount. The plaintiff is found entitled to interest at the rate of 9% per annum on ₹2,34,068/- for the period from 06.7.2023 till 30.9.2024, interest at the rate of 9% per annum on ₹2,08,945/- for the period from 24.9.2022 till 30.9.2024, interest at the rate of 9% per annum on ₹2,15,271/- for the period from 28.01.2023 till 30.9.2024, interest at the rate of 9% per annum on ₹2,08,082/- for the period from 29.01.2023 till 30.9.2024, interest at the rate of 9% per annum on ₹1,66,068/- for the period from 28.10.2020 till 30.9.2024 and interest at the rate of 9% per annum on ₹2,68,356/- for the period from 12.7.2022 till 30.9.2024. The plaintiff is also found entitled to pendente lite and future interest at the rate of 9% per annum on the said sum of ₹17,84,624/- from the date of institution CS (COMM) No. 1129/2024 Page No. 60 of 61 till the payment of the said amount by the defendant to the plaintiff. Decree sheet be prepared accordingly, and after compliance file be sent to records.
Digitally signedPronounced in the open court MANOJ by MANOJ
KUMAR
KUMAR 14:09:17
Date: 2025.09.26
on the 24th day of September, 2025. +0530
(MANOJ KUMAR-1)
District Judge (Commercial Court)-05,
Central District: Tis Hazari: Delhi
CS (COMM) No. 1129/2024 Page No. 61 of 61