Delhi District Court
Om Prakash vs Municipal Corporation Of Delhi on 13 December, 2023
IN THE COURT OF SH. AJAY PANDEY
DISTRICT JUDGE (COMMERCIAL COURT-10)
CENTRAL, TIS HAZARI COURTS, DELHI
CS Comm 927/23
Sh. Ajay Singh Chauhan,
Partner of
M/s Om Parkash
D-32, Parshant Vihar,
Delhi-110085 Plaintiff
Vs
1. Municipal Corporation of Delhi,
Through its Commissioner
Civic Centre, Minto Road,
New Delhi-110002.
2. Executive Engineer (Project) KPZ
Municipal Corporation of Delhi
Near Railway under bridge
Sawan Park, Delhi-110009 Defendants
Date of Institution : 06.06.2023
Date of Arguments : 28.11.2023
Date of Judgment : 13.12.2023
JUDGMENT:-
SUIT FOR RECOVERY OF Rs.1,99,04,909/- (RUPEES ONE CRORE NINETY NINETY NINE LAKH FOUR THOUSAND NINE HUNDRED AND NINE ONLY) WITH PENDENTELITE AND FUTURE INTEREST.
1. Admitted facts of the case are that plaintiff is a M/s Om Prakash Vs MCD Page no. 1 of 14 CS Comm 927/23 partnership firm. The suit is filed through Mr. Ajay Singh Chauhan who is one of the partner of the plaintiff firm. Plaintiff was awarded construction work by the defendant through work order number 13 dated 03.01.2020 by defendant no.2. Plaintiff completed the work under the contract to the satisfaction of defendant no.2. Defendant no.2 completed the final measurements of the works done by the plaintiff and following running bills pertaining to the aforesaid work order were passed by the defendant no.2 after recording measurements in his book :-
Sr. No Bills Amount of passed Date of passing of running bills in Rs. bill
1. 1st running bill 40,26,147.00 23.03.2020
2. 2nd running bill 62,99,077.00 30.07.2020
3. 3rd running bill 28,02,224.00 21.08.2020
4. 4th running bill 29,56,541.00 29.10.2020
5. 5th running bill 20,42,126.00 29.06.2021 Total 1,80,95,372.00
2. It is inter-alia stated in the plaint that plaintiff did not raise any objection to the bills passed by defendant no.2 but the defendants did not release the payment to the plaintiff. It is further stated that the payment was supposed to be released within a period of 6-9 months.
Thus the plaintiff is entitled to receive interest @ 10% per annum on the entire outstanding amount of Rs.1,80,95,372/- from 01.04.2022 to 30.04.2023 and the total pre suit liability of the defendants to the plaintiff M/s Om Prakash Vs MCD Page no. 2 of 14 CS Comm 927/23 comes out to be Rs.1,99,04,909. Plaintiff served a legal notice dated 11.08.2021 upon the defendants, through his counsel, under section 477/478 of Delhi Municipal Corporation Act calling upon the defendants to release the sum of Rs.1,80,95,372/- along with interest but to no avail. Hence, the present suit.
3. The plaint is duly supported by statement of truth.
4. Defendant filed written statement to the plaint.
Apart from admitting the award of work to the plaintiff, its performance by plaintiff and passing of bills by defendant no.2, defendant stated that there is no cause of action for filing the suit; that the suit is barred by limitation; that the suit has not been signed, verified and instituted by a duly authorized person because Mr. Ajay Singh Chauhan is only one partner of the plaintiff firm and there is no resolution by the Board of Partners in his favour; that suit is filed in contravention of the general rules, directions and conditions of contract duly agreed by the plaintiff; that the clauses of contract clearly described that payment of past bills will depend upon availability of funds in particular head of account with MCD and payment of bills shall be made strictly on que basis i.e. first past liabilities will be cleared and thereafter the release of payment for passed bills will be in order of demand received at Heard Quarters under particular head of account; that under clause 4(B) the Contractor has to submit its RA/final bill with M/s Om Prakash Vs MCD Page no. 3 of 14 CS Comm 927/23 measurement otherwise nothing will be due on account of work execution, but the plaintiff has not submitted his bill till date; that the defendant had already released payment of Rs.10,61,000/- as gross amount on 28.07.2023 through RTGS to the contractor; that there is no specific mention in title and heading of the suit that the suit is filed under Commercial Courts Act 2015; that the suit is filed in violation of section 12A of Commercial Courts Act 2015 because plaintiff has not exhausted the remedy of pre-litigation mediation; that the suit is not properly verified as per the Commercial Courts Act 2015; that the plaintiff has not filed certified copies of documents as per requirement of Order XI Rule(2) CPC as applicable to Commercial Courts Act; that the plaint is liable to be returned under order VII rule 10 CPC.
5. In reply on merits of the written statement, the allegations in preliminary objections are relied and it is stated that the plaintiff be put to strict proof of the averments about it being a partnership firm. It is not specifically denied that the legal notice dated 11.08.2021 was served upon the defendant. It is not stated that the defendant did not receive the legal notice of the plaintiff. It is reiterated that suit is barred by limitation and it is stated that the present proceedings have been initiated to harass the defendants and to drag them in frivolous litigation. Dismissal of suit is prayed.
M/s Om Prakash Vs MCD Page no. 4 of 14 CS Comm 927/23
6. The written statement and supporting affidavit are signed by Mr. Sunil Kumar, Assistant Engineer Civil, Project Keshav Puram Zone, MCD.
7. Plaintiff filed replication to the written statement reiterating his allegations in the plaint and denying contrary allegations of the written statement. It is stated categorically that the plaintiff approached the mediation center of Delhi Legal Services Authority (DLSA), prior to filing the present suit and thereafter DLSA issued non- starter report in favour of plaintiff. It is stated that defendants released a sum of Rs.10,07,950/- on 28.07.2021 and Rs.30,18,248/- on 18.09.2023.
8. It is pertinent to mention here that the written statement was filed by the defendant on 29.08.2023, and it appears that after filing of the written statement the amount of Rs.30,18,248/- was also released by the defendant on 18.09.2023.
9. Admission/denial of documents was completed.
Defendant has himself filed the running bills passed by them and plaintiff has admitted all five running bills which were duly attested by the Assistant Engineer Mr. Sunil Kumar.
10. Following issues were framed from the pleadings of parties on 03.10.2023 :-
1) Whether the suit is barred by limitation? OPD.
2) Whether the suit has not been instituted and
M/s Om Prakash Vs MCD Page no. 5 of 14
CS Comm 927/23
verified by a competent person? OPD.
3) Whether the plaintiff is entitled to recovery,
if so, to what amount? OPP.
4) Whether the plaintiff is entitled to interest, if
so, at what rate or for which period? OPP.
5) Relief.
11. In support of his case, Sh. Ajay Singh Chauhan, who is partner of plaintiff firm led his examination in chief by way of affidavit on 19.10.2023 and was cross-
examined on the said date. On 19.10.2023 itself the plaintiff evidence was closed.
12. Sh. Sunil Kumar, AE (Civil Project), Keshav Puram Zone, MCD also filed his affidavit in examination in chief on behalf of defendant and was cross-examined on 20.10.2023.
13. Both the parties filed their respective written submissions. Oral arguments were also heard on behalf of parties.
14. The court has gone through the evidence and material available on record and has considered arguments advanced on behalf of both the parties.
15. Issue wise findings of the court are as under:-
Issue no.1:- Whether the suit is barred by limitation? OPD.
16. Onus to prove this issue was upon the defendants. Learned Sh. Mohit Sharma submitted on behalf of M/s Om Prakash Vs MCD Page no. 6 of 14 CS Comm 927/23 defendants that the suit is barred by limitation because the work order was awarded to the plaintiff on 03.01.2020 whereas the suit has been filed on or after 29.05.2023. In fact the suit appears to have been filed on 06.06.2023.
17. Court is not in agreement with the submissions of learned Sh. Sharma. The period of limitation for recovery of amount may not commence immediately after the award of the work order dated 03.01.2020. The plaintiff had to do the construction work and then only he could have been entitled to receive payment from the defendants. The first running bill was passed by the defendant no.2 on 23.03.2020. Thereafter, the defendant continued to pass running bills in favour of plaintiff uptill 29.06.2021. There was continuity of construction work by the plaintiff as is reflected by passing of the running bills by the defendant. The running bills filed by the defendant themselves reflect that the measurement was being taken by the defendant no.2 even in the year 2021. The work was continuing by that time. Hence, the period for limitation for filing the present suit should commence after completion of the work because entire work was awarded to plaintiff through one single contract. The suit is within limitation period if the period is commenced after completion of work. Though no date is specified for completion of work. However, from the documents it can be easily inferred that the work M/s Om Prakash Vs MCD Page no. 7 of 14 CS Comm 927/23 continued till 2021 and the present suit filed on 06.06.2023 is therefore within limitation period. Otherwise also the payment qua first running bill dated 23.03.2020 amounting to Rs.40,26,147/- appears to have been already released by the defendants in two installments of Rs.10,07,950/- and Rs.30,18,248/- on 28.07.2021 and 18.09.2023 respectively. The subsequent running bills are of 30.07.2020 and of subsequent dates. The suit is within limitation if counted for either of the unpaid running bill. It is important to mention here that the first payments released to the plaintiff, after filing of suit need to be adjusted towards the first running bill because as per the stand of the defendant the payment is released in chronological order on que basis. This issue is accordingly decided in favour of plaintiff.
Issue no.2:- Whether the suit has not been instituted and verified by a competent person? OPD.
18. Onus to prove this issue was again upon the defendant. Learned Sh. Mohit vehemently argued that as per the partnership deed Ex.PW1/1, there are two partners in the plaintiff firm i.e. Sh. Om Prakash and Sh. Ajay Singh Chauhan S/o Sh. Om Prakash, both R/o D- 32, Prashant Vihar, Delhi-85 and each of the partner is to receive 50% of the profits and losses of the business of partnership firm. He argued that there is no authority by Mr. Om Prakash in favour of other partner Mr. Ajay M/s Om Prakash Vs MCD Page no. 8 of 14 CS Comm 927/23 Singh Chauhan, who has filed the present suit. He further argued that there is no resolution passed by the Board of Partners and therefore Sh. Ajay Singh Chauhan is not competent or authorise to sign, verify or institute the present suit.
19. A quick glance to the provisions of Partnership Act is necessary. Section 4 of the Indian Partnership Act 1932 defines "Partnership" as the relation between persons who have agreed to share profits of a business carried out by all or any of them acting for all. Hence, it is clear that one partner of the partnership firm can act on behalf of the other partners as well. As per section 18 of the Act a partner is the agent of the firm for the purpose of the business of firm. Section 19 (1) of the Act provides that any act of one partner binds the firm. Section 19(2) of the Act enumerates that implied authority of a partner do not empower him to do following acts i.e. to :-
(a) submit a dispute relating to the business of the firm to arbitration,
(b) open a banking account on behalf of the firm in his own name,
(c) compromise or relinquish any claim or portion of a claim by the firm,
(d) withdraw a suit or proceeding filed on behalf of the firm,
(e) admit any liability in a suit or proceeding M/s Om Prakash Vs MCD Page no. 9 of 14 CS Comm 927/23 against the firm,
(f) acquire immovable property on behalf of the firm,
(g) transfer immovable property belonging to the firm, or
(h) enter into partnership on behalf of the firm.
20. The acts barred in section 19 (2) of the Act do not include filing of a suit on behalf of firm. From the title, the present suit appears to have been filed by one of its partners on behalf of firm. Rights and liabilities of a partner in the partnership firm are joint and several. As per section 25 of the Act every partner is liable jointly with all other partners and also severally for all acts of the firm done while he is a partner. The present suit appears to have been filed by one of the partner, who is son of the another partner, for the benefit of the firm. No provision or citation has been referred by learned counsel for defendant to submit that Mr. Ajay Singh Chauhan is not competent to institute, sign and verify the suit. This court do not see any necessity of resolution in his favour. This issue is accordingly decided against the defendant.
Issue no.3:- Whether the plaintiff is entitled to recovery, if so, to what amount? OPP.
21. Learned Sh. Mohit Sharma submitted that the M/s Om Prakash Vs MCD Page no. 10 of 14 CS Comm 927/23 plaintiff has not complied with the general terms and conditions of the award of contract. He vehemently argued that as per the terms of contract plaintiff was supposed to submit his running and final bills but plaintiff has categorically admitted that he did not follow the conditions of contract. He emphasized following excerpt from the cross-examination of the plaintiff recorded on 19.10.2023:-
"Yes, I was awarded the aforesaid tender vide Work Order No. 13 dated 03.01.2020 ( Ex.PW1/5) and I accepted all the general terms and conditions in lieu of the aforesaid work order. I did not follow the condition/clause no.4(B), especially mentioned in Work Order No. 13 dated 03.01.2020 (Ex.PW1/5)."
22. He also argued that as per clauses 7, 9 and 9(A) of the general conditions of contract as well as per clause 4(B), plaintiff is not entitled to any payment because of non-submissions of bill by him.
23. Court is unable to digest the submissions of learned Sh. Mohit Sharma. After replying to the questions of learned counsel for the plaintiff in the portion of his cross-examination relied upon by learned counsel for defendant, the plaintiff volunteered that measurement was done jointly with JE and himself which bears his signature and all the bills and measurement were accepted by him and signed by him M/s Om Prakash Vs MCD Page no. 11 of 14 CS Comm 927/23 with dates in the measurement book and cash vouchers/bills and details of calculations and measurement were given to junior engineer by hand.
24. There is no dispute that the plaintiff did not perform the work. There is nothing to suggest that any complaint qua the work or conduct of the plaintiff was ever made by any person. There is nothing to suggest that any officer of the defendant had passed the bill without verifying the work, its quality or measurements. There is no pleading that any officer of the defendant had worked in connivance with the plaintiff. The running bills were duly passed by the competent authority i.e. the defendant no.2. If the plaintiff has accepted the said running bills without raising any dispute, the defendant should not withheld the same. Submissions of the bills by the plaintiff could have been necessary, had the plaintiff claimed any extra amount apart from the passed running bills. Once the plaintiff is satisfied with the measurements and procedures in passing the running bills, he need not to give his final bills to the defendant. Calling for further bills from the plaintiff, when the plaintiff is not raising any further claim is an entire futile exercise by the defendant without any application of mind. The amount of passed bills cannot be withheld on such ground. The terms and conditions of contract are to give certainty in the matters of contract and not to stop the application of commonsense and to be used as a tool M/s Om Prakash Vs MCD Page no. 12 of 14 CS Comm 927/23 to defeat the just claim of either party by applying a hyper technical approach.
25. Hence, this court is of the humble opinion that plaintiff is entitled to recovery of the amount of the passed bills totalling to Rs.1,80,95,372/-. The adjustment of the amount paid by the defendant on 28.07.2021 and 18.09.2023 be made out of this principal amount. This issue is accordingly decided in favour of plaintiff.
Issue no.4:- Whether the plaintiff is entitled to interest, if so, at what rate or for which period? OPP.
26. In view of the aforesaid discussion on issue no.1 it can be safely said that the defendant has wrongfully withheld the amount due to plaintiff. Last bill in favour of plaintiff was passed by the defendant on 29.06.2021. The plaintiff has claimed pre-suit interest w.e.f. 01.04.2022 to 30.04.2022. Thus the interest has been claimed by the plaintiff after the lapse of about 09 months of the last passed bill. The plaintiff is thus entitled to the pre-suit interest as claimed in the plaint. Reliance by learned counsel for the defendant on the terms and conditions of contract is of no help to him because as per the terms and conditions the plaintiff may not be entitled to receive interest if the payment is not made on account of non-availability of funds with the MCD in a particular head of account. No where it has been brought in the pleadings or evidence that the M/s Om Prakash Vs MCD Page no. 13 of 14 CS Comm 927/23 payment to the plaintiff was stopped because of non- availability of funds in any particular account head. The plaintiff is therefore entitled to the pre-suit interest as claimed by him as well as for the pendentelite and future interest @ 10% per annum. This issue is accordingly decided in favour of plaintiff.
Relief:-
27. In view of the aforesaid discussion of the court, suit of the plaintiff is decreed for an amount of Rs.1,99,04,909/- (RUPEES ONE CRORE NINETY NINETY NINE LAKH FOUR THOUSAND NINE HUNDRED AND NINE ONLY) with pendentelite and future interest @ 10% per annum. Adjustment of any amount paid by the defendant after institution of suit or during its pendency shall be made as on the date of making such payment from the initial principal sum of Rs.1,80,95,372/- (RUPEES ONE CRORE EIGHTY LAKHS NINETY FIVE THOUSAND THREE HUNDRED SEVENTY TWO ONLY).
28. Decree sheet be prepared accordingly.
29. File be consigned to record room.
Announced in the open court AJAY Digitally signed by AJAY PANDEY on the 13th day of December, 2023 PANDEY Date: 2023.12.13 16:51:13 -0300 (Ajay Pandey) District Judge (Commercial Court-10) Central, Tis Hazari Courts, Delhi. M/s Om Prakash Vs MCD Page no. 14 of 14 CS Comm 927/23