Delhi District Court
Vikas Verma vs Municipal Corporation Of Delhi on 1 December, 2025
Vikas Verma Vs. Municipal Corporation of Delhi
DLCT010036062025
IN THE COURT OF SH. DEEPAK GARG,
DISTRICT JUDGE-COMMERCIAL COURT-09
(CENTRAL DISTRICT), TIS HAZARI COURTS, DELHI
CIVIL SUIT (COMMERCIAL) NO.:- 282/2025
IN THE MATTER OF :-
Vikas Verma
Sole Proprietor of
M/s Amar Construction Co.
101, 1st Floor, Laxmi Tower-II
L.S.C., Saraswati Vihar,
Delhi-110034 ... Plaintiff
VERSUS
1.Municipal Corporation of Delhi Through Its Commissioner, Civic Centre, Minto Road, New Delhi-110002
2. The Executive Engineer (M-II) KPZ Municipal Corporation of Delhi Near Sai Baba Mandir, Shakti Nagar, Delhi-110052 ... Defendants SUIT FOR RECOVERY OF RS.92,64,554/-
Date of institution : 07/03/2025
Date on which Judgment was reserved : 01/12/2025
Date of Judgment : 01/12/2025
CS (Comm.) No. 282/2025 Page 1 of 20
Vikas Verma Vs. Municipal Corporation of Delhi ::- J U D G M E N T -::
1. By way of present judgment, this court shall adjudi-
cate upon suit filed by the plaintiff against the defendants for recovery of Rs.92,64,554/- alongwith pendent elite and future interest @ 12% per annum.
PLAINTIFF'S CASE
2. Brief facts necessary for just adjudication of the present suit, as stated in the plaint, are as under:-
i. The plaintiff is the sole proprietor of M/s Amar Construction Co., a firm duly enrolled as Mu- nicipal contractor with the defendants and is en- gaged in the civil nature of work for the NDMC and now, the Municipal Corporation of Delhi, since long.
ii. The defendant no. 1 i.e. MCD is a body corpo- rate of state of Delhi, established and governed un- der MCD Act. The suit is being filed against the de- fendants through its Commissioner who is in charge of all the acts and day to day business of the defen- dants.
iii. The work, in respect of which the present suit is being filed was awarded to the plaintiff by the de-CS (Comm.) No. 282/2025 Page 2 of 20
Vikas Verma Vs. Municipal Corporation of Delhi fendant no. 2 but since the defendant no. 1 is the overall in charge of all the activities of the MCD and the work order in question was also awarded by the defendant no. 2 to the plaintiff and on behalf of the defendant no. 1, therefore, the defendant no. 1 is the necessary and proper party for just adjudication of the present suit.
iv. The plaintiff being the Government Contractor approached for the work order through tender which was invited by the defendant no. 2. The defendant no. 2, after the satisfaction of the completion of the required conditions at the state of pre-work order, awarded work order No 15 dated 25.08.2022 for the nature of work as mentioned in the said work order, to the plaintiff for and on behalf of defendant no. 1.
v. After the award of the aforesaid work order, the plaintiff entered into an agreement with the de- fendants pertaining to the said work order as a pre- condition of the award of the work order and the same was signed by the plaintiff. The plaintiff made all the necessary arrangements for the execution and completion of the awarded work and completed the said work order to the satisfaction of Engineer-in- Charge/the defendant no. 2. The period prescribed CS (Comm.) No. 282/2025 Page 3 of 20 Vikas Verma Vs. Municipal Corporation of Delhi for defect liability also passed over without any neg- ative remark and to the satisfaction of the Engineer- in-Charge/defendant no. 2.
vi. The defendant no. 2 completed the final mea- surement of the aforesaid work and recorded in measurement Books and same was accepted by the plaintiff. Thereafter, defendant no. 2 prepared and passed the bills pertaining to the aforesaid work or- der and same was accepted by the plaintiff. Further as precondition of the award of work orders, the plaintiff had also deposited the security/earnest money towards the respective work order. The de- tails of amount of bills, date of passing and amount of security/earnest money are tabulated as under :
S. Work Amount of Date of Amount of No. Order No. passed (first & passing of bill security/earnest final) bill in Money in Rs.
Rs.
1. 1st 25,07,388.00 31.10.2022 2,53,875.00 Running Bill
2. 2nd and 52,21,821.00 31.07.2023 7,46,767.00 final bill Total 75,29,209.00 10,00,642.00 Grand Total of 75,29,209 + 10,00,642 85,29,851.00 passed bills and security amounts CS (Comm.) No. 282/2025 Page 4 of 20 Vikas Verma Vs. Municipal Corporation of Delhi vii. The defendants were under obligation to re- lease the aforesaid amount to the plaintiff within the aforesaid period of 6/9 months as laid down in clause 9 or within a reasonable time but the defen- dants have failed to release the payment of passed bill amount in favour of the plaintiff.
viii. Since the defendants neglected to make the payments, the plaintiff got issued a Legal Notice dated 24.04.24 to the defendants calling upon to re- mit the amount along with interest at the rate of 12% per annum. The said notice was duly delivered upon the said defendants but the defendants neither complied with the terms of the said legal notice nor replied the same in any manner.
ix. The defendants are liable to pay interest @ 12% p.a. on entire amount of Rs.85,29,851/- from 01.08.23 to 31.12.24 which comes to Rs.3,69,182/-. Thus the total suit amount including principal and interest comes to Rs.92,64,554/-. Hence, the plain- tiff has filed the present suit against the defendants.
DEFENDANT'S CASE CS (Comm.) No. 282/2025 Page 5 of 20 Vikas Verma Vs. Municipal Corporation of Delhi
3. The defendants contended inter alia that the suit of the plaintiff is liable to be dismissed as it is without any cause of action since the plaintiff has not submitted any bill (either interim or final). Though, the defendants ad- mitted having awarded the Work Order No. 15 to the plaintiff, however, it is submitted that the plaintiff has not submitted any bills on his letter pad that he was contrac- tually required to in terms of Clause 4(B) of the Work Order and the purported bills that the plaintiff seeks to rely upon are only internal notings of the defendants and they do not constitute bills for the purpose of payment and the suit is without any cause of action.
4. It is further submitted that as the plaintiff has failed to comply with Clauses 17 & 45 of the GCC, he is not entitled to refund of security deposit.
ISSUES
5. On the basis of the pleadings following issues were settled on 02.06.25 :
i. Whether the plaintiff is entitled for the recovery of the amount as claimed in the plaint? (OPP) ii. If the issue no. (i) is decided in affirmative, whether the plaintiff is entitled for the pendente-lite and fu ture interest. If so, at what rate and for which pe CS (Comm.) No. 282/2025 Page 6 of 20 Vikas Verma Vs. Municipal Corporation of Delhi riod? (OPP) iii. Relief.
EVIDENCE OF THE PLAINTIFF
6. In order to prove its case, plaintiff Sh. Vikas Verma has examined himself as PW1, who has filed his evi- dence by way of affidavit Ex.PW1/A and has relied upon the documents as under:
i. Copy of registration certificate of the plaintiff firm is Ex.PW1/1 (OSR).
ii. Copy of the work order bearing no. 15 dated 25.08.2022 is Ex.PW1/2.
iii. Copy of 1st Running Bill passed on 31.10.22 for work order no. 15 dated 25.08.22 is Ex.PW1/3. iv. Copy of 2nd Running Bill passed on 31.07.23 for work order no. 15 dated 25.08.22 is Ex.PW1/4. v. Copy of legal notice dated 24.04.24 along with postal receipt is Ex.PW1/5 (colly.). vi. Copy of relevant pages of General terms and condi tions of MCD is Ex.PW1/6.
7. This witness was cross-examined by the Ld. Counsel for the defendants and the same shall be discussed in the later part of the judgment.
CS (Comm.) No. 282/2025 Page 7 of 20Vikas Verma Vs. Municipal Corporation of Delhi EVIDENCE OF THE DEFENDANT
8. Despite opportunity being given, defendants have not lead any evidence in support of their claim.
ISSUE WISE FINDINGS Issue No. 1
(i) Whether the plaintiff is entitled to the recovery of the amount as claimed in the plaint? (OPP)
9. The onus of proving this issue was on the plaintiff.
10. It is the case of the defendants that suit of the plain-
tiff is pre-mature and he is not entitled to the suit amount for want of submitting the bills for payment. Reliance is placed upon the judgment in the case of North Delhi Municipal Corporation Vs. Sanjeev Ku- mar RFA No. 430/2017 decided on 22.03.2018.
11. It is the case of the plaintiff that the present suit has been filed in respect of work order No. 15 and first run- ning bill was passed by the defendants corporation in the sum of Rs.25,07,388/- and second & final bill was passed by the defendants in the sum of Rs.52,21,821/- both in respect of the said work order. It is further the case of the plaintiff that the security deposit amount of CS (Comm.) No. 282/2025 Page 8 of 20 Vikas Verma Vs. Municipal Corporation of Delhi Rs.10,00,642/- in respect of the said work order also remains to be paid by the defendants. This is not dis- puted by the Ld. Counsel for the defendants as well.
12. In respect of the said work order, it is the case of the plaintiff that the defendants had passed the first run- ning bill in the sum of Rs.25,07,388/- which is Ex.PW1/3 and further the payment of the second & fi- nal bill amounting to Rs.52,21,821/- was also passed by the defendants which is Ex.PW1/4 and the first page of the said bills were filled by the plaintiff and the re- maining pages were filled by the officials of the defen- dants.
13. At this stage, it is relevant here to state that on 01.12.2025, status report was filed by Sh. Sanjay Ku- mar, AE (Maintenance)-II, Keshav Puram Zone stating that the amount of the second running bill amounting to Rs.52,21,821/- has already been released to the plaintiff on 19.09.25 and the demand for the balance payment of Rs.23,07,388/- (amount of the first running bill) has already been submitted to the competent au- thority and the same would be released to the plaintiff in due course.
14. It is further relevant to state that on 01.12.25, Ld. Counsel for the plaintiff made a statement in the court CS (Comm.) No. 282/2025 Page 9 of 20 Vikas Verma Vs. Municipal Corporation of Delhi stating that :
(a) The amount of the First Running Bill passed by the MCD is Rs.23,07,388/-. Inadvertently, the said amount has been mentioned as Rs.25,07,388/- in the plaint in para no. 5 of the plaint due to typographical error. Hence, necessary correction may be carried out in the record.
(b) That the amount of the earnest & security de-
posit of work in question is Rs.7,46,767/-. Inadver- tently Rs.2,53,875/- has been claimed in the plaint as separate security deposit with respect to first running bill which the plaintiff is not claiming in the present suit now.
(c) That the amount of the Second & final Bill i.e. Rs.52,21,821/- has already been released by the MCD in favour of the plaintiff on 19.09.2025 and hence the said amount may be deducted from the claimed amount in the present suit.
15. It is not the case of the defendants that the officials of the defendants had not prepared these bills Ex.PW1/3 and Ex.PW1/4 respectively. These bills bear the signatures of the Executive Engineer concerned and the Asstt. Accounts Office (AAO) of the defen- dants and this fact has not been disputed by the defen- dants.
CS (Comm.) No. 282/2025 Page 10 of 20Vikas Verma Vs. Municipal Corporation of Delhi
16. Mere fact that particulars of the said bills were filled by some officials of the defendants in order to help and assist the plaintiff in its preparation and presentation is by itself non sufficient to reject the same. Rather signa- tures of the plaintiff on the said bills give rise to pre- sumption that these were submitted by the plaintiff himself and that approval was given by officials of the defendants and it leads to the inference that there was appropriate compliance of judgment of Hon'ble High Court in case NDMC Vs. Sanjeev Kumar (Supra).
17. In view of the aforesaid position, it cannot be said that the plaintiff had not submitted the said bills in re- spect of work order No. 15 after completion of work in accordance with the terms and conditions of the work contract. From the perusal of the record, it is evident that if the plaintiff has not complied with the GCC guidelines, the defendants also cannot be said to have been complied with the said guidelines. If the plaintiff is alleged to be guilty of non submitting of the bill in respect of the work order No. 15, the defendants are also equally guilty of passing the bill in respect of the said work order. Thus equity demands that if both the parties are guilty of non compliance of the terms and conditions of the agreement, only one party cannot be penalized for the default. Hence in my opinion, the claim of the plaintiff cannot be said to be non suited CS (Comm.) No. 282/2025 Page 11 of 20 Vikas Verma Vs. Municipal Corporation of Delhi due to the breach of the terms and conditions of the agreement between the parties on this ground alone.
18. The plaintiff in his testimony as PW1 has categori-
cally deposed that he immediately after the award of work order made all the necessary arrangements for the execution and completion of the awarded work or- der and completed the said work order before the stipu- lated time. He further deposed that the work was com- pleted by the plaintiff to the satisfaction of Engineer- in-Charge/Defendant no. 2 and the period prescribed for defect liability also passed over without any nega- tive remark and to the satisfaction of the Engineer-in- Charge/defendant no. 2. He further deposed that the defendant no. 2 completed the final measurement of the aforesaid work recorded in measurement books, thereafter the defendant no. 2 prepared and passed the running bills pertaining to the aforesaid work order and same were accepted by the plaintiff.
19. The issue of award of work order No. 15 to the plain-
tiff, the plaintiff having completed the said work order within time without any negative remark, final mea- surements of the work also carried out by the defen- dants and the preparation of the running bill in respect of the said work have not been denied by the defen- dants. Nothing has been brought on record by the de-
CS (Comm.) No. 282/2025 Page 12 of 20Vikas Verma Vs. Municipal Corporation of Delhi fendants to prove that the plaintiff is not entitled to the relief sought in respect of the said work order No. 15. There is no reason to disbelieve the testimony of PW1 and in view of unrebutted and unchallanged documents proved by the plaintiff in respect of the said said work order No. 15.
20. Thus, after the admission of plaintiff regarding re-
ceipt of amount of second & final bill amounting to Rs.52,21,821/- on 19.09.25, plaintiff is now held enti- tled to the payment of Rs.23,07,388/- (amount of the first running bill) which was cleared by the defendants in respect of the said work order No. 15.
21. Coming to the issue of refund of security deposit and earnest money in respect of said work order, the defen- dants have taken a plea that plaintiff is not entitled to refund for security for want of compliance of Clause 17 and 45 of GCC.
22. In this regard, the Hon'ble High Court of Delhi in case of Rajnish Yadav, Proprietor of M/s Bharat Con- struction Co. (supra) has observed as under :-
25. ........... 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-perfor-
mance of the statutory obligations on the part of the appellant/plaintiff. There is no material CS (Comm.) No. 282/2025 Page 13 of 20 Vikas Verma Vs. Municipal Corporation of Delhi to indicate that the appellant/plaintiff has not cleared its due towards labour or any other statutory levy. A considerable amount of time has lapsed since the contract was complete. 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. Admit- tedly, there are no grounds for MCD to appro- priate the security deposit. Thus, the same is required to be refunded to the appellant/plain- tiff.
23. Although during cross-examination, the PW1 admit-
ted that he had not submitted any labour clearance cer- tificate but it is relevant here to state that nothing has been placed on record by defendants to bring out that plaintiff has failed to clear the dues towards labour or any other statutory levy in respect of the said work or- ders. Admittedly, no claim has been made against de- fendants/MCD on account of any acts of commission or omission on the part of plaintiff and thus in these facts and circumstances as well as in view of the obser- vations made in the judgment of Rajnish Yadav, Pro- prietor of M/s Bharat Construction Co. (supra), plain- tiff is also entitled to refund of the security deposit and earnest money of Rs.7,46,767/- qua the said work or- der subject to statutory deductions by the MCD, if any.
Issue No. 2 CS (Comm.) No. 282/2025 Page 14 of 20Vikas Verma Vs. Municipal Corporation of Delhi
(ii) If the issue no. (i) is decided in affirmative, whether the plaintiff is entitled for the pendente- lite and future interest, if so at what rate and for what period? (OPP)
24. Ld. counsel appearing for the defendants states that as per Clause 7 of the agreement, defendants are not li- able to pay interest. On the other hand, Ld. Counsel appearing for the plaintiff urges that since the defen- dants failed to make payment within a period of 9 months, the defendants are liable to pay interest @ 12% p.a. on the entire outstanding amount.
25. In North Delhi Municipal Corporation & Anr. vs. Sanjeev Kumar (RFA-430/2017) & CM Nos. 15925- 26 of 2017,DOD: 22.3.2018), Hon'ble High Court dealt with the issues relating to clause-7, 9, 17 & 45 of the General Conditions of Contract extensively by framing the following questions:
(i) Whether payment of the principal amount can be delayed in view of Clause- 7 & 9 of the General Conditions of Contract read with the amendments?
(ii) Whether the refunds of earnest money/secu-
rity deposit can be delayed in view of Clause 17 & 45 of the General Conditions of Contract?
(iii) Whether interest is payable on delayed pay- ments/refunds and if so, for which period?
CS (Comm.) No. 282/2025 Page 15 of 20Vikas Verma Vs. Municipal Corporation of Delhi
26. After dealing with all the issues extensively, Hon'ble Court summarized the conclusions and findings in para 77 to 81 and same are reproduced as under:
77. The General Conditions of Contract i.e., clauses 7and 9 which are admittedly part of the work orders issued by both the NDMC and the EDMC are being tested in these batch of cases. A contract which stipulates that the consideration would be paid in an unforeseen time in the future based on certain factors which are indeterminable, would in effect be a contract without consideration. Even if the contract is held to be a valid contract, then the concept of 'reasonableness' has to be read into the same.
Section46 of the Contract Act and the explanation thereto is clear that "what is a reasonable time is a question off act in each case." A Corporation which gets works executed cannot therefore include terms in the contract which are per se unconscionable and unreasonable as-
a) There is no fixed time period as to when the funds would be available;
b) There is also no fixed mechanism to determine as to when and in what manner the head of account is to be determined and as to how the Contractor would acquire knowledge of these two facts;
c) There is also no certainty as to how many persons are in the queue prior to the Contractor and for what amounts;
d) There is enormous ambiguity in the receipt under the particular heads of accounts
78. These clauses in effect say that the Contractor is left with no remedy if the Corporation does not pay for the work that has been executed. Such a Clause would be illegal and contrary to law. Such clauses, even in commercial contracts, would be contrary to Section 25read with Section 46 of the Contract Act.
CS (Comm.) No. 282/2025 Page 16 of 20Vikas Verma Vs. Municipal Corporation of Delhi
79. The clauses do not specify an outer time limit for payment. The expression reasonable time has to be 'a time'. The concept of time itself is ensconced with specificity and precision. Clause 9 is the opposite of being precise. It is as vague and ambiguous as it could be because it depends on factors which are totally extraneous to the contract, namely -
.Allotment of funds to the Corporation by the Government;
. Allotment of funds in a particular head; . Allotment of funds for payments who are in queue prior to the contractor;
80. Thus, these factors, which are beyond the control of the Contractor and which would govern the payment of consideration, make the said clauses of the contract completely unreasonable. The clauses have to thus, be read or interpreted in a manner so as to instill reasonableness in them.
81. By applying the above said principles, in respect of final bills raised by Contractors for works executed,that have been approved by the Engineer-in-Charge, the Clauses have to be read in the following manner:
a) Reasonable time for making of payments of final bills in respect of work orders up to Rs.5 lakhs shall be 6 months and work orders exceeding Rs.5 lakhs shall be 9 months from the date when the bill is passed by the Engineer-in-
Charge.
b) The queue basis can be applicable for the payments to be made in chronology. However, the outer limit of 6 months and 9 months cannot be exceeded, while applying the queue system.
c) The payments are held to become due and payable immediately upon the expiry of 6 months and 9 months and any non-payment would attract payment of interest for the delayed periods.
d) A conjoint reading of Clauses 7 & 9 along CS (Comm.) No. 282/2025 Page 17 of 20 Vikas Verma Vs. Municipal Corporation of Delhi with the amendment dated 19th May, 2006, clearly shows that for the payment of bills, the contractors have to follow the queue basis and as and when the amount is available under the particular head of account, the amount would be payable. The amendment does not, however, have a condition that no interest is payable for delayed payment. Such a condition exists only in Clause
7. Clause 9, therefore, when read with the amendment has to mean that the Corporation itself considers 6 months and 9 months to be the reasonable periods for which the payments of the final bills can beheld back. Obviously, therefore, if payments are made,whether on a queue basis or otherwise, beyond the period of 6 months and 9 months, interest is payable.
e) To the extent that queue basis is applied only for clearing of payments which do not extend beyond the period of 6 months and 9 months period, it is reasonable. However, if the queue basis is applied in order to make Contractors wait for indefinite periods for receiving payments, then the same would be unreasonable and would have to therefore be read down.
f) The Security amount/Earnest money deposited would be refundable upon the fulfilment of the conditions contained in Clauses 17 and 45 of the General Conditions of Contract. Interest would be payable on delayed payments.
(emphasis supplied)
27. As per record, the first running bill was amounting to Rs.23,07,388/- & security deposit was of Rs.7,46,767/- in respect of the said work order and under Clause 7 and 9 of GCC, defendant ought to have released the payment within 9 months thereafter. It is not disputed that payment is to be released by Head Quarter and concerned zone is authorized only to verify and pass the bill(s) before sending it to Accounts Department CS (Comm.) No. 282/2025 Page 18 of 20 Vikas Verma Vs. Municipal Corporation of Delhi for release of payment. The first running bill in respect of the said work order was passed on 31.10.2022. Period of 9 months since passing of the said bills have already expired and hence plaintiff is not only entitled to recover the said amount from the defendants but the defendants are also liable to pay interest after expiry of period of 9 months from the date of passing of the bills i.e. w.e.f. 31.07.2023 in respect of the first running bill till the actual date of payment qua said work order no. 15 by the corporation. The rate of interest shall be simple interest @ 8% per annum in terms of aforesaid judgment of Hon'ble High Court.
Issue No. 3(iii) Relief.
28. In terms of the foregoing observations, with respect to the work order No. 15, defendants are directed to pay as under :
(i) an amount of Rs.23,07,388/- in respect of the first running bill with interest @ 8% p.a. w.e.f. 31.07.2023 till realization.
(ii) further the defendants would refund the security deposit and earnest money of Rs.7,46,767/- in respect of the said work order with interest @ 8% p.a. from CS (Comm.) No. 282/2025 Page 19 of 20 Vikas Verma Vs. Municipal Corporation of Delhi today till realization.
29. Decree sheet be prepared according.
30. File be consigned to Record Room.
Digitally
signed by
DEEPAK DEEPAK GARG
Date:
GARG 2025.12.01
15:29:07
+0530
Announced in the open Court on (Deepak Garg)
Day of 01st December, 2025 Distt. Judge, (Comm. Court)-09,
Central District, THC : Delhi
CS (Comm.) No. 282/2025 Page 20 of 20