Bangalore District Court
Trinity Mep Services Pvt Ltd vs M/S Hombale Constructions And Estats ... on 23 September, 2025
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IN THE COURT OF LXXXIII ADDL. CITY CIVIL & SESSIONS JUDGE,
COMMERCIAL COURT, BENGALURU (CCH-84)
Present: Sri S. Sudindranath, LL.M., M.B.L.,
LXXXIII ADDL. CITY CIVIL & SESSIONS JUDGE
BENGALURU.
COM.O.S.No.220/2025
Dated on this 23rd day of September 2025
Plaintiff/s M/S. TRINITY MEP SERVICES PVT. LTD.
No.C-1, Royal Suits,
Kalyanagar, Hennur Junction,
Next to Sony Show Room,
Outer Ring Road,
Bengaluru - 560043
Represented by its Director Anish
Puthettu Chacko S/o P C Chacko
Aged about 42 years,
(By Sri. Chandra Shekar L, Advocate)
// versus //
Defendant/s M/S HOMBALE CONSTRUCTIONS AND
ESTATES PRIVATE LIMITED
No.1312, 11th Main, Vijayanagar,
Bengaluru - 560040
Represented by Its Director
Mr Chaluve Gowda
(By Sri. Gaurav Ramakrishna, Advocate)
Date of Institution of suit : 14-02-2025
Nature of the suit : Recovery of money
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Date of commencement of : 02-04-2025
recording of the evidence
Date on which the : 23-09-2025
Judgment was pronounced.
: Year/s Month/s Day/s
Total duration
00 07 09
JUDGMENT.
This is a suit filed by the plaintiff company against
defendant company for recovery of sum of Rs. 18,90,004
towards retention amount and Rs. 37,191 towards unpaid
bill amount i.e. total sum of Rs. 19,27,195/= along with
interest thereon, which is quantified at Rs. 7,53,600 and
also for future interest.
2. The Plaint averments in brief are that, the plaintiff
company is in the business of supply, installation and
distribution of air conditioner and cooling equipment. The
defendant issued work order to the plaintiff for the value of
Rs. 3,45,00,000, which was enhanced to Rs. 3,75,63,944.
And plaintiff has completed the work entrusted to the
satisfaction of the defendant and handed over the same on
10-12-2021. Out of the total bill amount of Rs.
4,46,52,554/= including GST, the defendant has cleared the
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amount except for retention amount of Rs. 18,90,004, which
represents 5% of the contract value. The said retention
amount is towards defect liability period, which is for a
period of 12 months. And since the work was handed over
on 10-12-2021, the defect liability period has come to an
end on 10-12-2022. But in spite of the defect liability period
having come to an end, the defendant has not released the
5% retention amount. Apart from this, defendant is also
liable to pay Rs. 37,191 towards pending bill amount for
work completed. In spite of several reminders and issuance
of legal notice, the defendant has not cleared the said sum
of Rs. 19,27,195. Hence, for recovery of the said sum of Rs.
19,27,195, along with interest on the said sum at 18% per
annum from 10-12-2022, i.e. from date of completion of the
defect liability period till date of suit, which is quantified at
Rs. 7,53,600, along with future interest on the principal sum
due at 18% per annum, the present suit is filed.
3. The defendant has entered appearance through
counsel and filed a detailed written statement denying the
plaint averments. It is admitted that defendant has issued
work order of Rs. 3,45,00,000 and another work order of Rs.
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68,97,061 to the plaintiff. However, it is contended that the
defendant is the contractor under NBCC and plaintiff is the
subcontractor under the defendant. As per clause 9 of the
work order between the plaintiff and defendant, 5% of the
bill would be retained for defect liability period and 5%
would be retained to be released after payment of bills by
NBCC. However, in the present case, on the request of the
plaintiff, the defendant retained only 5% towards retention
amount to be paid after payment of bills by NBCC. Hence,
out of the bill amount, Rs. 18,90,004 is retained. Till date,
amounts are due to the defendant from NBCC and
therefore, till NBCC pays the amount to the defendant, the
defendant cannot release the said 5% retention amount to
the plaintiff. Apart from this, it is stated that clause 23.2 of
the general conditions of contract between the defendant
and NBCC provides that where there is delay in payment to
the contractor due to delay in release of payment by the
employer, no interest is payable for the said delay. This
clause in the general condition of contract between the
defendant and NBCC has to be read into the contract
between the plaintiff and defendant in view of clause 1 of
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the work order which provides that all conditions mentioned
in the tender document issued by NBCC will form part of the
contract. Thereby, it is contended that firstly, the 5%
retention amount of Rs. 18,90,004 is not payable since
amount is yet to be received from NBCC and apart from
this, in view of the above clause in the contract, no interest
is payable on the said amount. Insofar as the balance
amount payable towards work done of Rs. 37,191 is
concerned, the defendant has denied any such liability and
contended that apart from the retention amount, no other
amount is payable by the defendant and the said retention
amount is also payable only after the amounts are released
by NBCC. With these pleadings, the defendant has prayed
for dismissal of the suit.
4. On the basis of the above pleadings, this court has
framed the following issues;
(1) Whether plaintiff proves that plaintiff
is entitled to recovery of sum of Rs.
18,90,004 being the retention amount
which is payable on completion of the
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defect liability period which expired
on 30-11-2021?
(2) Whether the plaintiff proves that
plaintiff is entitled to recover Rs.
37,191 from the defendant towards
pending bill amount in respect of
work done by the plaintiff for the
defendant under the work order?
(3) Whether the plaintiff proves that
plaintiff is entitled to recovery of
interest component of Rs. 7,53,600 on
the principal sum of Rs. 19,27,195 at
the rate of 18% per annum from 10-
12-2022 to 12-2-2025?
(4) Whether defendant proves that
retention amount sought to be
recovered is in fact retention amount
which is repayable only after
clearance of bills by NBCC and
therefore till NBCC pays the amount
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to the defendant, the plaintiff is not
entitled to recovery of the said sum?
(5) Whether the defendant proves that
the plaintiff is not entitled to claim
interest on the retention amount in
view of clause 23.2 of the general
conditions of contract between
defendant and NBCC?
(6) Whether the plaintiff is entitled to the
reliefs claimed?
(7) What order or decree?
5. In the trial, the director of the plaintiff is examined as
PW1 and got marked Ex. P1 to P12. On behalf of the
defendant, representative of the defendant is examined as
DW1 and got marked Ex. D1 to D9.
6. Thereafter, I have heard the arguments of both sides
and perused the records of the case.
7. My answer to the issues are as follows;
Issue No. 1 : In the affirmative.
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Issue No. 2 : In the negative.
Issue No. 3 : As per finding.
Issue No. 4 and 5 : In the negative.
Issue No. 6 : As per finding.
Issue No. 7 : As per final order for the
following :-
REASONS.
Issue No. 1, 2 and 4:-
8. These issues are considered together because on one
hand, they deal with the entitlement of the plaintiff for
recovery of the retention amount and unpaid bill amount
and on the other hand, also deal with the defense raised by
the defendant that retention amount is not for defect
liability period, but retention amount which has to be
released only on payment by NBCC and since NBCC has not
released the payment, the said amount is not due and
therefore, these issues require common discussion and
hence considered together.
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9. The case of the plaintiff in brief is that, the plaintiff
company is in the business of supply, installation and
distribution of air conditioner and cooling equipment. The
defendant issued work order to the plaintiff for the value of
Rs. 3,45,00,000, which was enhanced to Rs. 3,75,63,944.
And plaintiff has completed the work entrusted to the
satisfaction of the defendant and handed over the same on
10-12-2021. Out of the total bill amount of Rs.
4,46,52,554/= including GST, the defendant has cleared the
amount except for retention amount of Rs. 18,90,004, which
represents 5% of the contract value. The said retention
amount is towards defect liability period, which is for a
period of 12 months. And since the work was handed over
on 10-12-2021, the defect liability period has come to an
end on 10-12-2022. But in spite of the defect liability period
having come to an end, the defendant has not released the
5% retention amount. Apart from this, defendant is also
liable to pay Rs. 37,191 towards pending bill amount for
work completed. In spite of several reminders and issuance
of legal notice, the defendant has not cleared the said sum
of Rs. 19,27,195. Hence, for recovery of the said sum of Rs.
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19,27,195, along with interest on the said sum at 18% per
annum from 10-12-2022, i.e. from date of completion of the
defect liability period till date of suit, which is quantified at
Rs. 7,53,600, along with future interest on the principal sum
due at 18% per annum, the present suit is filed.
10. In support of its case, the plaintiff has examined its
director as PW1 and got marked Ex. P1 to P12.
11. Ex. P1 is the board resolution of authorization in
favour of PW1 who is also the signatory of the Plaint. Ex. P2
are printouts of emails along with attachments. These
emails cover the period before entering into the work order
and the attachment is the digital copy of the work order
issued by the defendant to the plaintiff along with
annexures. Ex. P. 3 is the printout of email attaching the
amended work order. Ex. P4 is the ledger extract which
shows that amounts payable by the defendant is retention
amount of Rs. 18,90,004 as well as the balance payable
towards work done of Rs. 37,191 i.e. total sum of Rs.
19,27,195 which is the principal amount being claimed in
the present suit.
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12. Ex. P5 are the tax invoices raised by the plaintiff
against defendant. However, these are not of much
relevance in the present suit since the main dispute is in
respect of retention amount which is admittedly retained
and the question is whether retention amount is retained
towards defect liability period or towards payment due after
receiving the full amount from NBCC. Ex. P6 are the GST tax
returns of the plaintiff to show the remittance of GST on the
invoices. Ex. P7 is the form 26AS to show the TDS
deduction. Again, Ex. P6 and P7 are not of much relevance
because as already noted supra there is no dispute in
respect of the amount retained by the defendant and the
only dispute is regarding the purpose of retention. Ex. P8
are again emails exchanged between the parties and these
cover the period after completion of the work when plaintiff
was repeatedly seeking the release of the retention amount.
Ex. P9 is the legal notice caused by the plaintiff to the
defendant along with the postal acknowledgement and Ex.
P10 is the reply caused by the defendant in which the same
contention as taken in the written statement has been
raised. Ex. P11 is the non-starter report of PIM. Ex. P12 is
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the certificate under section 63 of BSA in respect of the
digital documents produced in this case.
13. Per contra, in the Written Statement while it is
admitted that defendant has issued work order of Rs.
3,45,00,000 and another work order of Rs. 68,97,061 to the
plaintiff, it is contended that the defendant is the contractor
under NBCC and plaintiff is the subcontractor under the
defendant. As per clause 9 of the work order between the
plaintiff and defendant, 5% of the bill would be retained for
defect liability period and 5% would be retained to be
released after payment of bills by NBCC. However, in the
present case, on the request of the plaintiff, the defendant
retained only 5% towards retention amount to be paid after
payment of bills by NBCC. Hence, out of the bill amount, Rs.
18,90,004 is retained. Till date, amounts are due to the
defendant from NBCC and therefore, till NBCC pays the
amount to the defendant, the defendant cannot release the
said 5% retention amount to the plaintiff. Apart from this, it
is stated that clause 23.2 of the general conditions of
contract between the defendant and NBCC provides that
where there is delay in payment to the contractor due to
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delay in release of payment by the employer, no interest is
payable for the said delay. This clause in the general
condition of contract between the defendant and NBCC has
to be read into the contract between the plaintiff and
defendant in view of clause 1 of the work order which
provides that all conditions mentioned in the tender
document issued by NBCC will form part of the contract.
Thereby, it is contended that firstly, the 5% retention
amount of Rs. 18,90,004 is not payable since amount is yet
to be received from NBCC and apart from this, in view of the
above clause in the contract, no interest is payable on the
said amount. Insofar as the balance amount payable
towards work done of Rs. 37,191 is concerned, the
defendant has denied any such liability and contended that
apart from the retention amount, no other amount is
payable by the defendant and the said retention amount is
also payable only after the amounts are released by NBCC.
With these pleadings, the defendant has prayed for
dismissal of the suit.
14. In support of its case, the defendant has examined its
representative as DW1 and got marked Ex. D1 to D9.
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15. Ex. D1 is the certificate under section 63 of BSA. Ex.
D2 is the incorporation certificate of the defendant. Ex. D3
is the notice inviting tender of NBCC. Ex. D4 is the plaint in
Commercial OS 317 of 2025 filed by the defendant against
NBCC for recovery of sums. And it is on the basis of this
plaint and the pendency of this suit that the defendant
contends that the defendant has not received full payment
from NBCC and consequently not liable to release the
retention amount to the plaintiff. Ex. D5 is the printout of
CIS in said Commercial OS 317 of 2025 to show that the suit
is pending. Ex. D6 is the general conditions of contract
which is standard form of contract uploaded by NBCC on its
website and this is relied upon to contend that this general
conditions of contract contains clause 23.2 which is a
prohibition for payment of interest for delay in payment due
to delay in release of payment by the original employer. Ex.
D7 is the authorization in favour of DW1. Ex. D8 are emails
exchanged between the parties relating to the period after
completion of the work when plaintiff was seeking release of
the payment. Ex. D9 is the certificate under section 63 of
BSA.
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16. Having considered the rival contentions of both
sides and the oral and documentary evidence on
record, at the outset it is to be noted that plaintiff is
seeking recovery of two sums of money from the defendant,
viz. retention amount and unpaid bill amount.
17. At the outset it is to be noted that there is no dispute
in respect of the awarding of the work by the defendant to
the plaintiff and the successful completion of the work by
the plaintiff on 10-12-2021. Further, there is absolutely no
dispute that out of the bill amount, defendant has retained
5% as retention amount which is a sum of Rs. 18,90,004. In
this regard it is to be noted that defendant has admitted
this fact at paragraph 10 of the written statement
wherein it is pleaded as follows;
"As per clause 9 of the work order, 10% of each
bill would be retained by the defendant in each
bill of which 5% would be released after expiry
of defect liability period and another 5% would
be released after payment of bills by NBCC to
the defendant. Further on request made by
the plaintiff, the defendant had retained only
5% towards payment to be made after the bills
of defendant were paid by NBCC India Limited.
Accordingly, a sum of Rs. 18,90,004 has
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been retained by defendant awaiting
payment from NBCC India Limited."
(Emphasis Supplied)
18. In view of the above categorical pleading in the
written statement, there cannot be any doubt that out of
the total bill amount payable by the defendant to the
plaintiff, a sum of Rs. 18,90,004 which represents 5% of the
contract value has been retained by the defendant. The
question to be decided is whether said retention
amount is towards defect liability period or towards
payment to be made after receiving the full payment
from NBCC. To decide this question, it is necessary to
extract the relevant clauses of the work order. The work
order is produced as an attachment to email at Ex. P2 and is
at page 22 of Ex. P2. The conditions of the work order which
are relevant are found at page 21 and 22 of Ex. P2 and are
as follows;
"All the conditions mentioned in NIT/tender
document issued by CPWD to HCEPL will form
part of the contract. This being a back-to-back
contract, all the conditions mentioned in the
CPWD contract hold good for this work." (Un-
numbered para at top of page 21)
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"Retention amount of 10% in each bill out of
which 5% will be released after NBCC clears
our bills. Remaining 5% will be released after
DLP of 12 months." (para 9 at page 21)
"Retention of 10% will be kept as security
deposit from each RA bill out of which 5% will
be released after client's bill certification and
other 5% after defect liability period of one
year." (para 10 at page 22)
19. Therefore, from these terms and conditions of the
work order which is an admitted document between the
parties, it is clear that the work allotted to the plaintiff was a
back-to-back contract or in other words, the work was
originally contracted by NBCC to the defendant and
defendant has subcontracted a portion of the said work to
the plaintiff. Further, total retention amount of 10% will be
retained from each RA bill amount and 5% shall be released
after defect liability period of 12 months, and remaining 5%
will be released after NBCC clears the bills of the defendant.
20. From above extracted paragraph 10 of the written
statement, it is clear that, although the work order provides
for retention of 10%, admittedly defendant has retained
only 5%. According to the plaintiff, this 5% amount retained
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is the defect liability period amount. Whereas according to
the defendant, as pleaded at paragraph 10 extracted
above, on the request of the plaintiff, defendant retained
only 5%, which is retention amount towards payment to be
made after clearing of the bills by NBCC. It is crucial to note
that defendant has specifically pleaded that instead of 10%
retention, only 5% was retained on the request made by the
plaintiff. However, the defendant has not produced any
document to show such a request being made by the
plaintiff to retain only 5% instead of 10%. In none of the
emails produced by either parties, such a request is
forthcoming. Therefore, the defendant having specifically
pleaded that retention amount was reduced to 5% instead
of 10% at the specific request of the plaintiff has failed to
prove the same.
21. There is absolutely nothing on record produced by the
defendant to show that before the work was completed,
there was any understanding between the parties that the
retention amount is towards amount payable after receiving
the payment from NBCC. Therefore, till the work was
completed, defendant has never conveyed to the plaintiff
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that the retention amount of 5% which is retained is for
defect liability period or for payment to be released after
full payment by NBCC. After the work is completed, the
emails exchanged between the parties are contained in Ex.
P8. Few of the emails exchanged between the parties after
completion of the work is also produced by the defendant at
Ex. D8. As already noted supra, before the amounts were
retained from the RA bills, there is no document to show the
understanding between the parties whether retention
amount was towards defect liability period or towards
amount payable after receiving payment from NBCC.
Therefore, it is necessary to analyze the emails which have
been exchanged between the parties after the work was
completed to see how the parties understood the purpose of
the retention amount. One of the earliest emails exchanged
between the parties is on 21-04-2021 which is available at
page 65 of Ex. P. 8. In fact, this email is earlier to the
handing over of the work which was on 10-12-2021 as
admitted in paragraph 6 of the plaint. In this email, the
representative of the defendant has written to the
representative of the plaintiff as follows;
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"For your information, we are awaiting a
completion report from NBCC. Once we get,
immediately we will issue it to you. Already
your inventories are signed and it can be
collected from site. Project is under DLP and
ends on 30th November 2021. Ledger
statement is attached."
(Emphasis Supplied)
22. Therefore, from this email which is written by the
representative of the defendant, it becomes clear that as
late as on 21-04-2021, the defendant has stated that
project is under defect liability period which will end on 30-
11-2021. Therefore, it is not open to the defendant to now
turn around and say there was no defect liability period and
consequently no amount was retained towards defect
liability period.
23. Counsel for defendant relied upon an email dated 25-
04-2022 (page 3 of Ex. D8) issued by the defendant to the
plaintiff referring to condition number 1 and 9 of the work
order and stating that defendant is yet to receive payment
from NBCC and after defendant receives it, the retention
amount will be released. However, this is an email issued
after completion of the work since it is dated 25-04-2022
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whereas admittedly the work was handed over on 10-12-
2021. Therefore, by the time this email was issued, the
retention amount had already been retained from the
running bills and therefore this is not decisive to ascertain
the purpose of the retention amount because the purpose
of the retention amount has to be determined on the basis
of correspondence between the parties at undisputed point
of time and not on the basis of contention taken by the
defendant when release of retention amount was claimed
by the plaintiff.
24. In this regard, counsel for defendant relied upon the
emails at Ex. P8 to contend that admittedly the 12-month
defect liability period would expire on 10-12-2022 because
in the plaint at paragraph 4 itself it is pleaded that work was
handed over on 10-12-2021 and admittedly the retention
period is for 12 months. He submitted that even before the
expiry of the retention period on 10-12-2022, the plaintiff
has written emails which are available at Ex. P8 which show
that plaintiff understood that, the retention amount is not
for defect liability period but for payment to be made after
receiving full payment from NBCC. He argued that, if really
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the retention amount was towards defect liability period,
the plaintiff could not have sought for release of the
retention amount earlier to 10-12-2022. This contention
cannot be accepted because in one of the emails issued by
the plaintiff around this point of time which is available at
top of page 68 of Ex. P8, plaintiff has written as follows;
"We have successfully completed the warranty
period for the HVAC system. Requesting you to
release the retention amount of Rs. 18 lakhs
without any further delay."
25. It is relevant to note that HVAC system is the subject
matter of the present suit because in the work order which
is available at page 21 of Ex. P2 also the work description is
given as HVAC. Again, in another email issued by the
plaintiff dated 24-01-2022 (page 70 of Ex. P. 8), plaintiff has
written as follows;
"Dear Sir,
As per our books, warranty period is closed on
10-12-2021. Requesting you to release the
retention amount without any further delay."
26. Therefore, from these emails, it is clear that from the
very beginning, the plaintiff was seeking release of
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retention amount on the ground that defect liability period
is over. And therefore, it is clear that from the very
beginning, it was the contention of the plaintiff that the 5%
retention amount is towards defect liability period. At no
point of time before completion of the work has the
defendant put the plaintiff on notice that retention is in fact
not towards defect liability period but towards payment to
be made after receiving full payment from NBCC. On the
other hand, defendant in one of the earliest emails dated
21-04-2021 (extracted supra) says that project is under DLP
which ends on 30-11-2021.
27. Defendant in reply to the emails of the plaintiff
seeking release of retention amount, has taken different
stands at different points of time. In the email dated 16-12-
2021 (page 68 of Ex. P.8), defendant says that defendant
will release payment once defendant gets the clearance
from NBCC. It is to be noted that, defendant does not say
that payment will be released after receiving full payment
from NBCC but refers to "clearance from NBCC". It is to be
noted that, this email dated 16-12-2021 is just one week
after the project was handed over on 10-12-2021.
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Therefore, it appears the clearance from NBCC referred to in
the above email is the conformation from NBCC that the
work is completed satisfactorily and certainly it cannot be
interpreted to mean that defendant will clear the payment
after receiving the full payment from NBCC. Therefore, not
only in the email dated 21-04-2021 where the defendant
admits that the project is under defect liability period, again
in the email dated 16-12-2021, defendant agrees to release
the payment on clearance from NBCC. Even at that point of
time, defendant does not say that retention amount cannot
be released till full payment is received from NBCC. Again,
in another email dated 24-01-2022 issued by the defendant
(Page 70 of Ex. P.8), defendant has written to the plaintiff as
follows;
"Please bear with me. We will release your
retention as soon as possible. We have cleared
all your RA bills on time. Just for
information. We have not received our
pending amount from CPET yet."
(Emphasis Supplied)
28. From the above email also, it is clear that defendant
has undertaken to release the retention amount soon. No
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doubt, reference is made to the fact that defendant has not
received the payment from CPET which refers to NBCC. But
this statement is qualified by the earlier expression "just
for information". This makes it clear that even in the said
email dated 24-01-2022, the defendant has not put the
precondition that release of retention amount is only
subject to receiving of entire payment from NBCC.
29. Again, in another email which is available at top of
page 72 of Ex. P8, defendant has written as follows;
"As discussed, please submit the indemnity
bond. Can be submitted on your letterhead
also. We will do the needful at the earliest once
received."
30. Therefore, even in this email, defendant has agreed
to release the retention amount subject to indemnity bond
being furnished by the plaintiff. Therefore, at no point of
time, defendant has taken the contention that retention
amount cannot be released till defendant receives the
entire payment from NBCC. Again, in another email
available at the bottom of page 74 of Ex. P8 dated 3-3-
2022, defendant writes to the plaintiff that retention
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payment will be released once in a month for all projects as
per company procedure and will process the same.
Therefore, even in this email, defendant agrees for
releasing the retention amount and does not put the
condition that it can be released only after receiving full
payment from NBCC.
31. After having assured to release the retention amount
all along, only in the email dated 25-04-2022 which is
available at page 3 of emails produced by the defendant at
Ex. D8, does the defendant for the first time rely upon
condition 1 and 9 to deny release of retention amount on
the ground that defendant has not received the payment
from NBCC. From the above conduct of the defendant, it is
clear that at no point of time during the period when the
work was being done by the plaintiff and when 5% amounts
were being retained from the running bills, was there any
understanding between the parties that instead of 10%
retention, only 5% retention amounts will be withheld and
such retention shall be towards amounts to be released
after full payment by NBCC. Instead, there is an admission
at the earliest point of time in the first email at Ex. P8 dated
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21-04-2021 that the project is under defect liability period.
Even after completion of the project, in the emails from
December 2021 up to March 2022, the defendant never
raises the contention that retention amount cannot be
released without receiving full payment from NBCC but goes
on assuring the plaintiff that retention amount will be
released. Only in April 2022 does the defendant raise the
contention by relying upon clause 1 and 9 of the work order
that retention amount retained is not towards defect liability
period but towards amount to be released after receiving
full payment from NBCC. Therefore, from this conduct of
defendant, it is not possible to accept the contention that
the retention amount was not towards defect liability
period. Therefore, I accept the contention of the
plaintiff that the 5% amount of Rs. 18,90,004 which
is admittedly retained by the defendant out of the
running bills is amount towards defect liability
period. Admittedly, the defect liability period has expired
on 10-12-2022. Such being the case, plaintiff is entitled to
release of the said sum from the defendant.
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32. For the sake of argument, even if it is considered that
the retention amount is to be released only after receiving
full payment from NBCC, even then, the said amount is
liable to be released by defendant for the simple reason
that defendant admits having received the entire bill
amount from NBCC. In this regard, it is to be noted that in
the written statement itself, at paragraph 13, a statement is
made that defendant filed W.P. 13214 of 2022 seeking a
writ of mandamus to direct the NBCC to make payment of
Rs. 1,30,82,476 and Hon'ble High Court by order dated 29-
11-2023 directed NBCC to pay the amount and accordingly
NBCC has paid sum of Rs. 1,24,00,000 to the defendant on
9-1-2024. Defendant contends that, despite receiving the
said payment of Rs. 1.24 crores from NBCC, still amount of
approximately Rs. 2 crores is liable to be paid by NBCC for
which Defendant has filed Com. OS 317/2025 and on this
ground contends that even as on date, defendant has not
received full payment from NBCC. However, plaint said
Commercial OS 317 of 2025, discloses that at paragraph 11,
the defendant herein pleads that in terms of the final bill,
the total net amount payable by NBCC is Rs. 1,30,82,746
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and at paragraph 16, defendant herein admits that it has
received payment of Rs. 1.24 crores out of the said sum of
Rs. 1.30 crores on 9-1-2024. The claim in Com. OS 317-
2025 is only for disputed amount of Rs. 5.82 lakhs together
with interest on delayed payment and certain other
disputed amounts such as refund of arbitrary deductions
and also for damages due to delay in release of interim
payments during COVID-19 period and reimbursement of
legal expenses. Therefore, it is clear that out of the total bill
amount claimed by the defendant of Rs. 1.30 crores,
defendant has already received Rs. 1.24 crores and it is
only a small disputed amount of approximately Rs. 5 lakhs,
which is admittedly pending from NBCC. The other claims
raised in the said suit are only for interest and certain other
disputed amounts and also damages. Therefore, it is clear
that as on 9-1-2024, which is much before the filing of the
present suit, the defendant had received the payment of
entire bill amount from NBCC. Therefore, even for the sake
of argument, if it is considered that retention amount is to
be released only after receiving the full bill amount from
NBCC, since in pursuance of the orders of Hon'ble High
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Court in WP, defendant has received the entire bill amount
and the pending claim with NBCC is only for disputed
amount, for interest and damages etc., the contention of
defendant that retention amount cannot be released since
payment is not received by NBCC cannot be accepted.
Therefore, viewed from this angle also, plaintiff is
entitled to the retention amount of Rs. 18,90,004.
Accordingly, I answer issue No. 1 in the affirmative
and issue No. 4 in the negative.
33. In so far as issue number 2, which is in respect of the
claim of the plaintiff for unpaid bill amount of Rs. 37,191,
there is no doubt that DW1 in his cross-examination at
paragraph 8 has stated that on reconciliation of account, it
is forthcoming that there is no shortfall and no amount is
payable, but has also stated that if any such amount is
payable, defendant is ready to clear such amount. However,
this cannot be considered as an admission that defendant
has admitted liability to pay Rs. 37,191 towards pending bill
amount in respect of work done by the plaintiff. The plaintiff
has not produced any material to show that plaintiff is
entitled to the said amount towards pending bill amount. On
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the other hand, from the emails at Ex. P8, already noted
supra, it is clear that at undisputed point of time, the
plaintiff was only claiming for release of retention amount
and has not whispered about any unpaid bill amount. It is
only for the first time, while issuing the legal notice, that
plaintiff has raised the contention that there is also unpaid
bill amount payable of Rs. 37,191. Since plaintiff has not
raised this contention about unpaid bill amount at the
earliest point of time in the emails, which were issued
immediately after completion of the work, this contention of
the plaintiff that plaintiff is entitled to recover the said
amount towards unpaid bill amount is unacceptable and
accordingly rejected. Accordingly, I answer issue
number 2 in the negative.
Issue No. 3 and 5:-
34. These issues are considered together because on one
hand, they deal with the claim of the plaintiff for interest
amount from 10-12-2022 to 12-2-2025 and on the other
hand, with the defense of the defendant that in view of
clause 23.2 of the general conditions of contract, no interest
can be levied on release of retention amount.
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35. In this regard, defendant relies upon the conditions of
the work order which is available at page 21 of Ex. P2 which
states that all conditions mentioned in the tender document
issued by NBCC will form part of the contract between
plaintiff and defendant. Then defendant relies upon clause
23.2 of the general conditions of contract which is extracted
at paragraph 11 of the written statement as follows;
"It is clearly agreed and understood by the
contractor that notwithstanding anything to
the contrary that may be stated in the
agreement between NBCC and the contractor,
the contractor shall be entitled to payment
only after NBCC has received the
corresponding payments from the client /
owner for the work done by the contractor. Any
delay in release of payment by the client /
owner to NBCC leading to a delay in the
release of the corresponding payment by NBCC
to the contractor shall not entitle the
contractor to any compensation interest from
NBCC."
36. This contention of the defendant that in view of
clause 23.2, the plaintiff is at the most entitled only to the
principal retention amount and not for interest thereon
cannot be accepted for the simple reason that while
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answering issue number 1, I have already held that the
retention amount is towards defect liability period and not
towards amount to be released after receiving full payment
from NBCC. Such being the case, when admittedly the
defect liability period came to an end 12 months after 10-
12-2021, that is on 10-12-2022, the retention amount
became payable as on 10-12-2022. Such being the case,
defendant is liable to pay interest on the principal retention
amount from the date on which it became due and payable,
that is from 10-12-2022 onwards. Therefore, the contention
of the defendant that no interest can be imposed is rejected
and I answer issue No. 5 in the negative.
37. However, the plaintiff cannot be granted the interest
of Rs. 7,53,600 as claimed because the said interest is
calculated on Rs. 19,27,195, whereas I have held while
answering issue No. 1 and 2 that plaintiff is only entitled to
principal amount of Rs. 18,90,004, which is the retention
amount and not entitled to the claimed unpaid bill of Rs.
37,191.
38. Therefore, the plaintiff is entitled to reasonable rate of
interest on sum of Rs. 18,90,004 from 10-12-2022 onwards.
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Insofar as the question as to what is the reasonable rate of
interest to be awarded to the plaintiff, the conduct of the
defendant in two respects has to be noted. Firstly,
defendant has denied the payment of admitted retention
amount to the plaintiff on the specious ground that it is not
retention amount towards defect liability period, but
towards payment to be released after receiving full bill
amount from NBCC, which is untenable and already rejected
supra. Apart from this, even if the contention of the
defendant that retention amount is to be released only after
receiving full bill payment from NBCC is accepted for the
sake of argument, as already noted supra, defendant has
admitted in the written statement itself of having received
sum of Rs. 1.24 crores from NBCC in pursuance of the
orders of Hon'ble High Court in WP on 9-1-2024, which is
before the filing of the present suit. And the further claims
of the defendant against NBCC in Commercial OS 317 of
2025, whose plaint is marked as Ex. D4, is towards certain
disputed amounts, interest and damages. Therefore,
although defendant has received the entire bill payment in
pursuance of the orders of Hon'ble High Court in WP, the
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defendant continued to deny payment of admitted amount
to the plaintiff on the ground that it has yet to receive
amount from NBCC, which is claimed in the original suit,
whereas what is claimed in the suit is only disputed amount,
interest and damages and not amount towards bill
payment. Considering the above conduct of the defendant, I
am of the view that defendant should be mulcted with
interest at 18% per annum from the date of completion of
the defect liability period, that is from 10-12-2022 till date
of decree. From the date of decree, in terms of Section 34
of CPC, plaintiff is entitled to interest at 6% per annum till
date of realization. Accordingly, I answer issue no. 3.
39. Before parting, reference may be made to the
rulings relied upon by learned counsel for defendant. Firstly,
reliance is placed upon Nabha Power Limited v. Punjab
State Power Corporation Limited reported in (2018)
11 SCC 508 wherein the principles for interpretation of
business contracts has been laid down and it is held that
explicit terms of contract are always the final word with
regard to intention of the parties and a multi-clause
contract has to be understood and interpreted in a manner
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so that one particular clause of the contract does not do
violence to another part of the contract. Reliance is also
placed upon Maharashtra State Electricity Distribution
Company vs Ratnagiri Gas and Power Private Limited
- (2025) 1 SCC 333 for the proposition of law that a
commercial contract cannot be interpreted in a manner that
is at odds with the original purpose and intent of the parties
to the document and deviation from the plain terms of the
contract is warranted only where it serves business efficacy
better. However, both these authorities are not of any aid to
the defendant herein for the simple reason that in view of
the detailed discussion above, it is clear that this is a case
which turns upon the facts of the case and not upon
interpretation of the business contract between the parties.
The terms of the business contract are crystal clear and
does not call for any detailed interpretation. However, I
have already held supra that by the conduct of the parties,
it is clear that the retention amount of 5% which is retained
is towards defect liability period and therefore liable to be
returned on completion of the said period. Hence, these
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rulings will not help the defendant in any manner in this
case.
Issue no. 6:-
40. Having answered issue no. 1 to 5 as above, I hold that
plaintiff is entitled to the reliefs in terms as stated while
answering issue no. 1 to and 5 above.
Issue no. 7:-
41. Having answered issue no. 1 to 6 as above, I proceed
to pass the following :-
ORDER.
The suit is partly decreed, with cost.
It is held that the plaintiff is entitled
to recover sum of Rs. 18,90,004/= along
with interest on said sum at 18% per
annum from 10-12-2022 till date of decree
and interest on said sum of Rs.
18,90,004/= at the rate of 6% per annum
from date of decree till date of realization,
from the defendant.
Office to draw decree accordingly.
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Office to issue soft copy of this
judgment to both sides by email if
furnished.
[Dictated using MacWhisper Pro 10.8.1, transcript revised,
corrected, signed and then pronounced by me in open court on
this the 23rd day of September, 2025]
(S. Sudindranath)
LXXXIII ADDL.CITY CIVIL AND SESSIONS JUDGE,
COMMERCIAL COURT, BENGALURU
ANNEXURE
1.List of witnesses examined on behalf of Plaintiff/s:
PW1 : Sri Anish Puthettu Chacko
2. List of witnesses examined on behalf of Defendant/s:
DW1 : Sri Vinod Kumar
3. List of documents marked on behalf of
Plaintiff/s:
Ex.P1 : Board Resolution dated 04.11.2024.
Ex.P2 : Printout of e-mails along with attachments.
Ex.P3 : Printout of e-mail along with attachment.
Ex.P4 : Summary sheet furnishing details of invoices.
Ex.P5 : Tax Invoices.
Ex.P6 : Printout of GST website.
Ex.P7 : Digital form 26 AS.
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CT 1390_Com.O.S.No.220-2025_Judgment.doc KABC170006372025 Ex.P8 : Print out of e-mails.
Ex.P9 : Office copy of legal notice dated 19.09.2023 along with RPAD ackowledgement. Ex.P10 : Reply dated 03.10.2023 along with postal envelope.
Ex.P11 : Non starter report of PIM.
Ex.P12 : Certificate under Section 63 of BSA.
4. List of documents marked on behalf of Defendant/s:
Ex.D1 Certificate under Section 63 of BSA. Ex.D2 Digital copy of incorporation certificate. Ex.D3 Notice inviting tender. Ex.D4 Certified copy of plaint in Com.O.S.317/2025 Ex.D5 Print out of CIS showing case status of Com.O.S. 317/2025 Ex.D6 Instruction to tender and GCC downloaded from website.
Ex.D7 Board resolution. Ex.D8 Print out of e-mails. Ex.D9 Certificate under Section 63 of BSA. (S. Sudindranath) LXXXIII ACC & SJ,
(COMMERCIAL COURT), BENGALURU