Delhi District Court
Paresh Constructions And Foundations ... vs National Thermal Power Corporation on 19 November, 2018
IN THE COURT OF SHRI GIRISH KATHPALIA,
DISTRICT & SESSIONS JUDGE
SOUTH EAST : SAKET COURT, NEW DELHI.
SUIT No. 209619/2016
PARESH CONSTRUCTIONS AND FOUNDATIONS PVT. LTD.
A COMPANY REGISTERED UNDER THE COMPANIES ACT
HAVING ITS REGISTERED OFFICE AT
E59, CHEMBUR NAKA, NEAR BANK OF INDIA
SION TROMBAY ROAD,
CHEMBUR MUMBAI 400 071
....PLAINTIFF
VERSUS
1.NATIONAL THERMAL POWER CORPORATION (A GOVERNMENT OF INDIA ENTERPRISES) HAVING ITS HEAD OFFICE AT CORPORATE CENTRE, NTPC BHAWAN, SCOPE COMPLEX, 7, INSTITUTIONAL AREA, LODI ROAD, NEW DELHI.
2. SUBHASH PROJECTS AND MARKETING LTD.
A COMPANY REGISTERED UNDER THE COMPANIES ACT HAVING ITS REGISTERED OFFICE AT F27/2, OKHLA INDUSTRIAL AREA, PHASEII, NEW DELHI 110020 ...DEFENDANTS Date of filing this suit : 01.04.2011 First date before this court : 25.05.2017 Arguments on application concluded on : 29.10.2018 Date of Decision of application : 19.11.2018 Suit no. 209619/2016 Page 1 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC APPEARANCE : Shri Ashish Verma, counsel for plaintiff Shri R.R. Kumar and Amrender Kumar, counsel for defendant no. 1 Shri Ayush Agarwala, counsel for defendant no. 2 J U D G M E N T
1. Plaintiff company, engaged in the business of civil construction work has brought this suit for recovery of Rs. 87,41,734/ with interest and cost against the defendants, claiming that the defendants are jointly and severally liable to pay the said amount. Originally this suit was filed on the Original Side of the Hon'ble Delhi High Court, but in view of enhancement of pecuniary jurisdiction of District Courts, this suit was transferred to the District Courts and my learned predecessor retained the suit in this court. The suit was contested by both defendants by way of their separate written statements which followed replications from plaintiff and on the basis of issues framed by the Hon'ble Single Judge of the Delhi High Court, trial was carried out. I have heard learned counsel for all three parties who took me through records.
2. Briefly stated, factual matrix as pleaded by plaintiff is as follows.
Suit no. 209619/2016 Page 2 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC 2.1 Defendant no. 1 had employed the services of defendant no. 2 as main contractor by way of letter of award dated 08.09.2006 for execution of civil works of main plant of Korba Super Thermal Power Project, stage III (1 x 500 MW) at Korba. Out of the total awarded work, defendant no. 2 decided to entrust a portion of the civil work to plaintiff, so plaintiff was called upon to submit its offer in order to execute the work of Pile Foundations for the main plant. On the basis of identified scope of work, plaintiff submitted its offer dated 05.02.2007 which was accepted by defendant no. 2 vide Letter of Intent dated 06.02.2007 for a sum of Rs. 5,52,74,500/.
2.2 However, after getting the plaintiff commit to certain rates, defendant no. 2 decided to reduce the scope of work before issuing the Work Order. Defendant no. 2 issued Work Order dated 27.02.2007 for a sum of Rs. 3,58,64,500/.
2.3 During execution of the assigned work, plaintiff had to submit the Running Accounts Bills (RA Bills) on monthly basis on which defendant no. 2 had to make payments within 15 days of the receipt of bills with measurement sheets certified by Engineer Incharge of defendant no. 2 or defendant no. 1. But defendant no. 2 failed to adhere to the payment discipline by not making the Suit no. 209619/2016 Page 3 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC payments timely and completely due to which plaintiff was prevented from proceeding with the work at the required speed. On account of slow progress of plaintiff, main civil work of defendant no. 1 also got adversely effected. Also, by July 2007, plaintiff got inclined to terminate and foreclose the contract with defendant no. 2 and informally conveyed its intention to do so to the representatives of both defendants.
2.4 In order to resolve the issue and address the concern of defendant no. 1 qua slow progress of piling work, a meeting was held on 02.08.2007 at the site in which representatives of plaintiff informed the representatives of defendant no. 1 that slow progress of work was due to insufficient cash flow from the side of defendant no. 2. In the said meeting, defendant no. 1 expressed desire that one more rig (second rig) be mobilized in order to reduce the backlog, for which plaintiff agreed provided it was assured timely and appropriate payments against RA Bills. In the said meeting, defendant no. 1 undertook, with expressed consent of defendant no. 2, the obligation of making direct payment to plaintiff after the cut off date of 24.06.2007 provided plaintiff moved the second rig. Minutes of meeting dated 02.08.2007 were drawn up and duly signed by representatives of all three parties and the same were thereafter acted upon. On 02.08.2007, plaintiff had submitted all Suit no. 209619/2016 Page 4 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC five RA Bills, towards payment whereof a sum of Rs. 8,00,000/ was paid to plaintiff by defendant no. 2 on 15.09.2007 and thereafter, the agreement arrived at between the parties on 02.08.2007 was acted upon.
2.5 Relying upon the agreement dated 02.08.2007, plaintiff mobilized second rig and continued to execute the work with due diligence. The second rig which was to be mobilized was lying with the plaintiff at its Panipat work site from where it was transported to Korba and reached the site of defendant no. 1 on 08.10.2007, though accessories of the second rig had already reached the site on 26.09.2007. Thereafter, the second rig was put to use by plaintiff and the piling work for the project was completed with the help of both rigs.
2.6 But in breach of agreement dated 02.08.2007, defendant no. 1 did not make any payment to plaintiff despite multiple correspondence. However, on account of pressure on it, defendant no. 1 compelled defendant no. 2 make some payments to plaintiff time to time, as enlisted in para 12 of the plaint. Thereby, during the period from 27.09.2007 to 03.04.2008, defendant no. 2 paid a total sum of Rs 80,00,000/ that too by making arbitrary deductions out of RA bills.
Suit no. 209619/2016 Page 5 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC 2.7 Plaintiff completed the awarded work in the month of January 2008 under the scope of further reduced work order to an amount of Rs. 2,07,71,690/. Plaintiff submitted Final Bill dated 11.01.2008 after completion of work. Defendant no. 2 certified only a sum of Rs. 9,71,434/ vide certification dated 15.03.2008 as the amount due and payable to the plaintiff. But even out of the certified amount, plaintiff received only Rs. 4,00,000/ from defendant no. 2 on 03.04.2008. According to plaintiff, vide certification dated 15.03.2008, defendant no. 2 had illegally deducted a sum of Rs. 16,52,242/ towards recovery of reinforcement steel and a sum of Rs. 20,16,360/ towards recovery of liner plates.
2.8 The reinforcement steel and liner plates required for the construction work were supplied to plaintiff by defendant no. 2, who had received the same from defendant no. 1. In the month of February 2008, a reconciliation statement was prepared by defendant no. 2, in which it was agreed that plaintiff would be responsible for return/recovery of the steel and allowable percentage of wastage, which was higher than the percentage as stated in the conditions of contract of defendant no. 1. But since the said Suit no. 209619/2016 Page 6 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC reconciliation statement was got signed from plaintiff under coercion assuring immediate release of pending payments, that reconciliation statement deserves to be ignored.
2.9 According to plaintiff, the amount due and payable by defendants is Rs. 64,78,621/ consisting of a sum of Rs. 5,71,434/ towards outstanding as per certificate of payment, a sum of 10,38,585/ towards security deposits deducted at a rate of 5% from RA Bills, a sum of Rs. 12,00,000/ towards mobilization of second rig under entry pass dated 08.10.2007, a sum of Rs. 16,52,242/ towards illegal deductions on account of reinforcement steel, and a sum of 20,16,360/ towards illegal deductions on account of MS Liner Plates. Plaintiff also claims a sum of Rs. 22,63,113/ towards pre suit interest with effect from different dates on the said outstanding amount.
2.10 Hence the present suit for recovery of Rs. 87,41,734/ with pendentelite and future interest at a rate of 12% per annum and costs of the suit.
3. Defendant no. 1 in its written statement raised certain preliminary objections and set up its factual matrix as follows.
Suit no. 209619/2016 Page 7 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC 3.1 Since plaintiff had entered into contract with defendant no. 2 only, there is no privity of contract between plaintiff and defendant no. 1, so the present suit is not maintainable against defendant no. 1.
3.2 Since the entire work under the contract was performed in Korba Chhattisgarh, cause of action arose only at Korba; and since head office of defendant no. 2 is in Noida UP, the present suit falls beyond the territorial jurisdiction of this court.
3.3 Since plaintiff has filed the present suit on the basis of minutes of meeting dated 02.08.2007, the suit is barred by limitation so far as defendant no. 1 is concerned.
3.4 The work order contract was given to plaintiff by defendant no. 2 only and the same does not form part of contract between defendant no. 1 and defendant no 2, so defendant no. 1 has no specific knowledge of the contents of that contract. Defendant no. 1 was vitally interested in timely completion of work awarded to defendant no. 2 and there being no privity of contract with plaintiff, performance of plaintiff was not an issue for defendant no. 1.
Suit no. 209619/2016 Page 8 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC 3.5 Admittedly, a meeting took place on 02.08.2007 between representatives of all three parties, but it is the minutes of that meeting which present a clear picture. It was decided in that meeting that unless the bills raised by plaintiff were duly certified by defendant no. 2, there was no authority with defendant no. 1 to make any payments and since after 02.08.2007, defendant no. 2 did not certify any bill of plaintiff no payment could be made by defendant no. 1. Further, on 02.08.2007, plaintiff had undertaken to mobilize the second rig within 15 days but it failed and could mobilize the rig only on 10.07.2007.
3.6 Defendant no. 1 never promised to make any direct payment to plaintiff without certification of bills by defendant no. 2.
3.7 As regards security at site, CISF had been given job of parameter security of the site in the sense that all material and equipment brought by the contractor had to be cleared by CISF. But beyond that, security of the equipment and material was of the contractors/ sub contractors.
3.8 By way of letters dated 01.11.2007, 17.04.2008 and 27.06.2008 defendant no. 1 specifically informed the plaintiff that Suit no. 209619/2016 Page 9 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC none of its Bills had been certified by the defendant no. 2, so defendant no. 1 was unable to make payments against those bills directly to the plaintiff. Rather, defendant no. 2 had raised serious doubts and challenges pertaining to plaintiff's bills. Even the Final Bill dated 11.01.2008 of plaintiff was raised on defendant no. 2 and was never forwarded to defendant no. 1 for payment.
3.9 Therefore, the suit, so far as the same is against defendant no. 1, is liable to be dismissed.
4. Defendant no. 2 also in its written statement raised certain preliminary objections and set up its case as follows.
4.1 The suit is barred by law of limitation. The suit is also bad on account of nonjoinder of necessary parties and is also barred by principles of acquiescence, waiver, resjudicata and estopple.
4.2 Payment of the RA Bills was to be made to plaintiff within 15 days after receipt of the bill duly certified by Engineer Incharge of defendant no. 2 or the defendant no. 1 but plaintiff always failed to get the certification of its work from defendant no. 1 visavis the Engineer Incharge of defendant no. 2 Suit no. 209619/2016 Page 10 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC within 15 days and most of the payments were made within contractual provision. But inspite of timely payments, plaintiff failed to adhere to the timelines of the project due to which defendant no. 2 had to incur additional expenditure qua increase in fabrication and erection cost of structural steel work.
4.3 Inspite of getting regular payments from defendant no. 2, plaintiff did not make regular payments to its crew which hampered the progress of work. On account of slow progress, plaintiff was unable to start the piling in ABC row, TG area auxiliary columns in ABC rows upto 21.07.2007 for which both defendants expressed their deep concern and convened a meeting on 02.08.2007 wherein plaintiff agreed to mobilize second rig in order to clear the backlog.
4.4 Defendant no. 2 fulfilled its promise forming part of minutes of meeting dated 02.08.2007 by making payment of Rs. 8,00,000/ to plaintiff but plaintiff failed to mobilize second rig within 15 days as contemplated in the said meeting. The second rig was mobilized only on 08.10.2007, that is with 67 days delay which increased the costs of defendant no. 2 on account of idling of erection gang, increase of consumable rates and crane idling charges etc. Since the second rig was mobilized much belatedly, Suit no. 209619/2016 Page 11 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC which delayed the entire project, plaintiff is not entitled to any money towards the said mobilization.
4.5 The security amount deducted from RA Bills was lawfully withheld by defendant no. 2 and the same would be utilized for protanto satisfaction of the claim of defendant no. 2 of Rs. 85,35,274/ on account of completion of unfinished job of plaintiff.
4.6 No illegal deduction was made by defendant no. 2 from the bills submitted by plaintiff. There was no false representation or coercion in making the plaintiff sign the joint reconciliation statement.
4.7 Therefore, the suit is liable to be dismissed.
5. Plaintiff filed replications to written statements of both defendants, denying their pleadings and reaffirmed the plaint contents.
6. On the basis of pleadings, following issues were framed by the Hon'ble Single Judge of the Delhi High Court :
Suit no. 209619/2016 Page 12 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC (1) Whether the suit is bad qua defendant no. 1 on account of lack of privity of contract? OPD1 (2) Whether the Delhi Court has the territorial jurisdiction to try and decide the suit? OPP (3) Whether the suit is barred by limitation? OPD2 (4) Whether the suit is bad on account of non joinder of necessary parties? OPD2 (5) Whether the suit is barred by principle of acquiescence, waiver, rejudicata and estopple? OPD2 (6) Whether the plaintiff is entitled to a decree for a sum of Rs. 87,41,734/? If so to what effect? OPP (7) Whether the plaintiff is entitled to interest at a rate of 12 % per annum? If so on what amount and for what period? OPP (8) Relief.
7. In support of their respective cases, plaintiff and defendant no. 1 examined their authorized representative and an employee as their solitary witnesses but no evidence was led on behalf of defendant no. 2. I heard Shri Ashish Verma, learned counsel for plaintiff, Shri R.R. Kumar, counsel for defendant no. 1 and Shri Ayush Agarwala, counsel for defendant no. 2. My issuewise findings are as under :
ISSUE No. 1 (privity of contract)
8. Onus of proof of issue no. 1 was on defendant no. 1. Learned counsel for defendant no. 1 argued that even according to Suit no. 209619/2016 Page 13 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC testimony of PW1 in crossexamination, all claims of plaintiff are against defendant no. 2 only, so defendant no. 1 has no liability at all. It was argued by learned counsel for defendant no. 1 that defendant no. 1 had entrusted work to defendant no. 2, who in turn subcontracted work to plaintiff, as such defendant no. 1 recognized plaintiff only as agent of defendant no. 2. It was argued that minutes of meeting dated 02.08.2007 Ex. P1 cannot be treated as novation of contract and the original contract remains a bipartite contract between plaintiff and defendant no. 2. It was also argued that the minutes of meeting Ex. P1 are only a record of concerns expressed by defendant no. 1 over delay in completion of project. It was further argued that in Ex. P1, defendant no. 1 had assured only to consider paying directly to plaintiff and that too subject to mobilization of second rig within 15 days, which was admittedly not done. It was also argued that defendant no. 2, with whom plaintiff had direct contract did not lead any evidence on the issue under consideration.
9. On the issue under consideration, learned counsel for defendant no. 2 argued that in its plaint itself, the plaintiff has set up a case of novation of contract under Section 62 of the Contract Act and once Ex. P1 was executed between the parties, the original contract between plaintiff and defendant no. 2 need not be acted Suit no. 209619/2016 Page 14 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC upon. It was argued that direction for mobilization of second rig came from defendant no. 1 and not from defendant no. 2, therefore, defendant no. 1 cannot be permitted to retract in the name of privity of contract.
10. Learned counsel for plaintiff argued that since the ultimate beneficiary of the work done by plaintiff was defendant no. 1 only, under the garb of privity of contract, defendant no. 1 cannot seek to be absolved. It was argued that minutes of meeting dated 02.08.2007 Ex. P1 clearly stipulated a tripartite agreement between the parties, from which none of them can be allowed to walk out. It was argued that in Ex. P1, defendant no. 1 had specifically assured to make payments directly to the plaintiff provided second rig was mobilized. According to plaintiff, there was no explicit understanding between the parties that if the second rig was mobilized not within 15 days, defendant no. 1 would not be liable to pay the plaintiff.
11. At the very outset, it needs to be kept in mind that it is nobody's case that defendant no. 2 was not authorized to sub contract the work awarded to it by defendant no. 1. It is nobody's case that the subcontract between plaintiff and defendant no. 2 was not lawful. Admittedly, plaintiff executed the assigned work, of Suit no. 209619/2016 Page 15 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC which the ultimate beneficiary was defendant no 1 only and also admittedly, defendant no. 1 never objected to performance by plaintiff of a part of work assigned to defendant no.2.
12. The minutes of meeting dated 02.08.2007, proved on record as Ex. P1 are the most crucial piece of documentary evidence, so far as the issue under consideration is concerned. The said document Ex. P1 is admittedly signed by the persons authorized by all parties to this suit. As reflected from Ex. P1, in the tripartite meeting held on 02.08.2007, defendant no. 1 expressed serious concern on account of nonstart of piling since 21.07.2007 in ABC row, TG Area, Auxiliary Columns in ABC row by defendant no. 2 or plaintiff and requirement of urgent mobilization of second rig. As further reflected from Ex. P1, in the said tripartite meeting, plaintiff expressed concern due to delay in release of payments by defendant no. 2 and requested for release of direct payment from defendant no. 1 and it was agreed between the parties that out of the outstanding 5th RA Bill of Rs. 23,00,000/, balance Rs. 8,00,000/ would be paid by defendant no. 2 expeditiously and for work done after 24.06.2007, plaintiff requested for direct payments from defendant no. 1, for which defendant no. 2 agreed. As further reflected from Ex. P1, in the said tripartite meeting, the parties agreed that plaintiff would raise bills which would be certified by Suit no. 209619/2016 Page 16 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC defendant no. 2 for direct payment by defendant no. 1 after mobilization of the second rig, which according to plaintiff was expected to reach Korba from Panipat within 15 days. Most importantly, as further reflected from Ex. P1, defendant no. 1 clarified that it would consider the said arrangement only after second rig was mobilized by plaintiff. Admittedly, second rig was mobilized by plaintiff and was even put to use.
13. There is further important documentary evidence in the form of multiple correspondence between plaintiff and defendant no. 2, copies whereof were also sent to defendant no. 1 but defendant no. 1 never raised even a whisper of objection in the form of privity of contract. Not only this, vide letter dated 01.11.2007 Ex. P17, defendant no. 1 assured the plaintiff, stating :
"the work was awarded to you by SPML, however NTPC will honour the commitance as per MOM dated 02.08.2007", though defendant no. 1 also put a condition that it would honour its commitment provided first para of Ex. P1 regarding urgent mobilization of second rig was performed. Even in Ex. P3, the letter dated 17/25.04.2008 of defendant no. 1, the reason for non payment addressed to the plaintiff was only to the effect that bills were not certified by defendant no. 2 and it was not that defendant no. 1 had no liability to pay.
Suit no. 209619/2016 Page 17 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC
14. There was also multiple correspondence between plaintiff and defendant no. 1 including letter dated 15.10.2007 (Ex. P9), letter dated 16.10.2007 (Ex.P10), letter dated 30.10.2007 (Ex. P11), letter dated 17.06.2008 (Ex.P13) and letter dated 07.07.2008 (Ex. P14), which clearly reflect that agreement arrived at between the parties on 02.08.2007 by way of Ex. P1 was being duly acted upon by all parties. All those communications were exchanged on behalf of defendant no. 1 by its DGM (C) Shri J.Kalim, who continues to be in employment of defendant no. 1 (as per D1W1 examined on behalf of defendant no. 1) but was deliberately kept away from the witness box and in his place, one Shri Monojit Banerjee was examined by defendant no. 1 as D1W1, who stated in response to most of the questions in crossexamination that he was not aware about the relevant facts. Therefore, it is also a fit case to draw adverse inference against defendant no. 1 that had Mr. Kalim been produced in the box, he would have deposed contrary to the case set up by defendant no. 1 as regards issue under consideration.
15. In view of above circumstances and explicit terms of Ex. P1 coupled with admitted status that second rig was mobilized by plaintiff as desired by defendant no. 1 and put to use to the ultimate benefit of defendant no. 1, it cannot be said that there was no privity of contract between plaintiff and defendant no. 1.
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16. Consequently, issue no. 1 is decided against defendant no. 1 and it is accordingly held not proved that the suit is bad qua defendant no. 1 on account of lack of privity of contract.
ISSUE No. 2 (territorial jurisdiction)
17. Onus of proof of issue no. 2 was on plaintiff. Learned counsel for plaintiff argued that merely because the awarded work was performed in Korba, Chhattisgarh, territorial jurisdiction to Delhi courts cannot be denied since the present suit is not pertaining to the immovable property. It was argued on behalf of plaintiff that since head offices of both defendants are in Delhi, the present suit is within territorial jurisdiction of this court. It was also argued that even refusal to pay was by way of correspondence issued from Delhi, so this court has territorial jurisdiction to decide this suit.
18. On behalf of both defendants, it was argued that since the contract was executed in Kolkata and work was performed in Korba, there having been no cause of action in Delhi, this court lacks territorial jurisdiction.
Suit no. 209619/2016 Page 19 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC
19. Under Section 20 of the Code of Civil Procedure, every suit, subject to the limitations laid down in Section 1519 of the Code, has to be filed in a court within local limits of whose jurisdiction the defendants actually reside or carry on business or cause of action arises wholly or partly. Explanation appended to Section 20 of the Code clarifies that a corporation 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 also has a subordinate office at such place.
20. In the present case, cause of action arose partly in Kolkata where the original Work Order Ex. P25 was issued by defendant no. 2 to plaintiff and partly in Korba where, by way of Ex. D2, defendant no. 1 issued approval of the subcontract between plaintiff and defendant no. 2 and where the awarded work was performed. Ex. D6 is a communication dated 27.06.2008 sent by defendant no. 1 from its Delhi office to plaintiff, whereby defendant no. 1 for the first time took a stand that since there was no privity of contract, defendant no. 1 shall not make payments to plaintiff, therefore, part of cause of action also arose in Delhi in view of settled legal position that cause of action constitutes that bundle of facts, which if not pleaded, suit would not succeed. Admittedly, registered office of both defendants is in Delhi.
Suit no. 209619/2016 Page 20 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC
21. That being so, vide Section 20 of the Code, plaintiff had option to institute the present suit in Kolkata or Korba or Delhi where cause of action partly arose or in Delhi where both defendants have their registered offices.
22. Consequently, issue no. 2 is decided in favour of plaintiff and it is accordingly held proved that the Delhi Court has territorial jurisdiction to try and decide this suit.
ISSUE No. 3 (limitation)
23. Onus of proof of this issue was on defendant no. 2, who opted not to lead any evidence. But this issue was hotly contested by both sides.
24. Learned counsel for plaintiff argued that the present suit filed on 01.04.2011 was well within limitation period keeping in mind that part payment towards outstanding dues was received by plaintiff from defendant no. 2 on 03.04.2008 by way of cheque which constitutes acknowledgment of part payment under Section 19 of the Limitation Act. It was further argued that even otherwise, the limitation period to file this suit would commence from the date Suit no. 209619/2016 Page 21 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC of refusal of defendant no. 1 to pay and that date was in June 2008 by way of Ex D6, so the suit is within time.
25. Learned counsel for defendant no. 2 argued that the part payment dated 03.04.2008 cannot help plaintiff in order to seek benefit of Section 19 of the Limitation Act because the same was not accompanied with a written acknowledgment of liability and also because plaintiff did not formally prove the said payment. Learned counsel for defendant no. 2 further argued that even if the said part payment dated 03.04.2008 is used to extend benefit of Section 19 of the Act, that benefit can be extended only as regards limited claim of plaintiff pertaining to the outstanding amount as per certificate Rs. 5,71,434/ and not the entire suit amount. In support of his arguments, learned counsel for defendant no. 2 placed reliance on the judgments in the cases titled Arjunlal Dhanji Rathod vs Dayaram Premji Padhiar, AIR 1971 Patna 278; Jai Hind Oil Mills (Kerala) vs Kerala Electrical Allied Engineering Co. Ltd., 1990 (2) Kerala Law Journal 342; Israrul Haq vs Lala Ram, AIR 1966 All 249; Abdul Aziz vs Munna Lal, AIR 1921 All 325; Panna Lal vs Ram Singh, 1928 (X) ILR 750; Rajiv Khanna vs Sunrise Freight Forwarders P. Ltd., 2016 (158) DRJ 334; M/s J.K. Lakshmi Cement Ltd. vs M/s Namit Plastic P. Suit no. 209619/2016 Page 22 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC Ltd., (2009) 160 DLT 340; and Sant Lal Mahto vs Kamla Prasad, 1952 AWR 118.
26. In rebuttal arguments, learned counsel for plaintiff argued that since the entire suit amount constitutes a single claim which arose out of single cause of action, argument of defendant no. 2 that the last payment dated 03.04.2008 would cover only one item out of the suit amount is fallacious. It was argued on behalf of plaintiff that since defendants did not deny that last payment was made on 03.04.2008 by way of cheque, there was no need for plaintiff to prove the last payment by way of formal evidence. It was argued that where last payment is made by way of cheque, there is no need for a separate acknowledgment in order to claim benefit of Section 19 of the Limitation Act. Lastly it was argued by learned counsel for plaintiff that even if the overall suit amount is split into different items enlisted at page 23 of the plaint, as sought to be done by defendant no. 2, taking each item separately also, the suit is within limitation. In support of his arguments, learned counsel for plaintiff placed reliance on the judgments titled Kedar Nath Mitra vs Dinabandhu Saha, (1915) ILR 42 Cal 1043; Chandra Nath vs Prahlad Narain, AIR 1961 Raj 154; Avtar Singh & Ors. vs Gurdial Singh & Ors., (2006) 12 SCC 552; Inder Singh Rekhi vs Suit no. 209619/2016 Page 23 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC Delhi Development Authority, (1988) 2 SCC 338; Puran Chand Nangia vs The Aviation Employees Cooperative House Building Society, 1989 (2) Arb LR 207 (Delhi); Allied Agencies & company vs Union of India, MANU/RH/0712/1992; Bigdot Advertising & Communications Pvt. Ltd. vs Union of India & Ors., MANU/DE/6231/2012; Hindustan Apparel Industries vs Fair Deal Corporation, AIR 2000 GUJ 261; Mogul India vs Indian Railway Construction Company Ltd. & Ors., MANU/PH/0342/2000; and Gurdial Singh & Ors. vs Food Corporation of India, MANU/DE/4278/2010.
27. On the issue under consideration, the questions to be examined are as to whether the last payment dated 03.04.2008 received by plaintiff can be relied upon in order to extend benefit of Section 19 of the Limitation Act to the plaintiff and if not so, whether suit of the plaintiff is otherwise within limitation as prescribed by law. As regards the first question, further questions to be examined are as to whether plaintiff was duty bound to plead and prove the said last payment; as to whether the said last payment would extend benefit of Section 19 of the Limitation Act to only one item of the suit claim; and as to whether the said last payment despite being by way of cheque, a written acknowledgment of debt Suit no. 209619/2016 Page 24 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC was necessary to extend benefit of Section 19 of the Limitation Act to the plaintiff.
28. In para 23 of plaint, it was specifically pleaded by the plaintiff that defendant no. 2 had released a sum of Rs. 4,00,000/ on 03.04.2008 as against the total amount of Rs. 9,71,434/ raised by plaintiff by way of 10th and Final Bill. In corresponding paragraphs of their respective written statements, defendant no. 1 denied the said pleadings for want of knowledge and defendant no. 2 specifically admitted the said pleadings. Further, the admitted document Ex. P13 is a communication dated 17.06.2008 sent by plaintiff to defendant no. 1 whereby, bills duly certified by defendant no. 2 were transmitted to defendant no. 1 alongwith details of payment received. The said details of payments which form Annexure to Ex. P13 enlists the payment of Rs. 4,00,000/ received by plaintiff from defendant no. 2 by way of cheque No. 144751 dated 03.04.2008. In other words, defendants never disputed the pleadings and/or documents of plaintiff to the effect that last payment of Rs. 4,00,000/ was made by defendant no. 2 to plaintiff by way of cheque dated 03.04.2008. That being so, there was no necessity for plaintiff to formally prove the said last payment by cheque.
Suit no. 209619/2016 Page 25 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC
29. Coming to the question as to whether the said last payment dated 03.04.2008 can extend benefit of Section 19 of the Limitation Act to the entire suit amount or only the balance amount of Rs. 5,71,434/, argument of defendant no. 2 is that while making the said last payment, defendant no. 2 intended only to pay the 10 th and Final Bill, therefore, the said payment cannot extend benefit of Section 19 of the Act to rest of the suit amount. I am unable to accept this argument. For, the different components of the suit amount cannot be split away from each other since all components taken together form the outcome of same cause of action which was failure of defendants to pay for the work done by the plaintiff. In the case of Chandra Nath (supra), the Hon'ble High Court of Rajasthan observed thus :
"6. In AIR 1916 Cal 580, Jenkins, CJ quoted with approval the following passage from the decision in Bonsey vs Wordsworth, (1856) 18 CB 325:
"Where a tradesman has a bill against a party for any amount in which the items are so connected together that it appears that the dealing is not intended to terminate with one contract, but to be continuous, so that one item, if not paid, shall be united with another and form one continuous demand the whole together forms but one cause of action and cannot be divided".
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7. It was held that a cheque given to the tradesman in part payment of the bill saved limitation so far as the entire demand was concerned."
In the judgments relied upon by learned counsel for plaintiff on this aspect, the components of suit amounts were segregated because each component arose out of separate cause of action, which is not in the present case. In the present case, the component of neither the security deposit nor the amount payable due to mobilization of second rig nor the illegal deductions on account of reinforcement steel/liner plates is such, which can stand individually on its own, because cause of action of all these components was same as that of the component regarding the balance payable out of 10th and Final Bill. What is enlisted at page 23 of the plaint are the five inseparable components of a single claim and not five separate claims raised by plaintiff. It is nobody's case that the last payment dated 03.04.2008 was on any account other than Korba contract. Most importantly, document Ex. P15 is letter of defendant no. 2 to defendant no. 1 whereby Final Bill dated 15.03.2008 prepared by defendant no. 2 was sent to defendant no. 1 and in the said Final Bill, all the components the suit amount were mentioned followed by total claim of approximately Rs. 56,00,000/ and not just one component enlisted at item no.1 on page 23 of the plaint. This also Suit no. 209619/2016 Page 27 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC clearly shows that even the parties were fully conscious always that the components mentioned in para 23 of the plaint are not separate claims of plaintiff.
30. Going a step deeper, I have also examined each of the said five components of the suit amount from stand point of limitation. As mentioned above, qua first component which is balance outstanding of the Final Bill, even according to defendant no. 2, benefit of Section 19 of the Act can be extended. Qua the second component of suit amount, which is the security deposit, the same was refundable to plaintiff only after expiry of defect liability period of one year from completion of work, in accordance with clause 23 of the terms of contract Ex. P25, and the work was completed in January 2008, so the security amount could not be claimed by plaintiff before January 2009 and consequently, suit filed on 01.04.2011 as regards recovery of security amount was within prescribed period of three years. Qua the third, fourth and fifth components of suit amount which are the cost of mobilization of second rig and deductions on account of steel and plates, the dispute arose for the first time only in the month of May/June 2008 when plaintiff received Ex. P15, which is a copy of correspondence dated 13.05.2008 addressed by defendant no. 2 to defendant no. 1 and consequently, suit filed on 01.04.2011 as regards recovery of the Suit no. 209619/2016 Page 28 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC said components of the suit amount also was within the prescribed period of three years.
31. Coming to the question as to whether the last payment to plaintiff, despite having been made by way of cheque, in the absence of a separate written acknowledgment, benefit of Section 19 of the Limitation Act can be extended to plaintiff. What Section 19 of the Act contemplates is fresh intitation of period of limitation and it is the part payment which operates as a factor necessary to restart the limitation period. The purpose of acknowledgment contemplated by proviso to Section 19 of the Act is only as a rule of evidence to prove the payment. It is the main provision of payment which is the necessary factor and not the proviso which deals with the evidence by which payment has to be proved. Most importantly, argument that in the absence of a separate acknowledgment, part payment by cheque would not extend benefit of Section 19 of the Act would mean that it is the acknowledgment and not part payment which restarts limitation and if this argument is accepted, it would make Section 18 of the Act otiose. Such an interpretation has to be eschewed.
32. In the case of Ashok Kumar (supra), even the dishonoured cheque was held to have the effect of acknowledgment Suit no. 209619/2016 Page 29 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC of liability. In the case of Hindustan Apparel Industries (supra) also the Full Bench of Hon'ble Gujarat High Court held that even dishonoured cheque would amount to acknowledgment of debt and liability which would save limitation as envisaged by Section 18 of the Limitation Act. In the case of Bigdot Advertising & Communications Pvt. Ltd. (supra) also, the Hon'ble Delhi High Court held that part payment by cheque would extend limitation under Section 19 of the Act.
33. As mentioned above, I have also examined as to de hors the benefit under Section 19 of the Limitation Act whether the present suit was filed within limitation. Admittedly, defendant no. 2 had been making payments to plaintiff in part till 03.04.2008. Ex. D5 is the letter dated 17.06.2008 which was delivered to plaintiff by defendant no. 1 on 26.04.2008 and till that date, neither of the defendants refused to pay the outstanding amount to plaintiff. In Ex. D5 also, defendant no. 1 did not refuse to pay; in the said letter, defendant no. 1 expressed inability to pay because they had not received the plaintiff's bill certified by defendant no. 2, which was a prerequisite even as per Ex. D5 in accordance with Ex. P1, the minutes of meeting dated 02.08.2007. It is by way of Ex. D6 dated 27.06.2008 that for the first time defendant no. 1 refused to pay the plaintiff, raising a bogey of privity of contract. It is on 27.06.2008 Suit no. 209619/2016 Page 30 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC that plaintiff had cause of action to file this suit and the suit having been filed on 01.04.2011 was clearly within the prescribed limitation period of three years.
34. Document Ex. P15 is a letter dated 13.05.2008 issued by defendant no. 2 to defendant no. 1 whereby defendant no. 2 delivered to the defendant no. 1 the 10 th Final Bill dated 15.03.2008 after verification for payment in accordance with minutes of meeting dated 02.08.2007. In other words, till 13.05.2008, Final Bill was not even ready for payment, so till that date plaintiff had no cause of action to file this suit. The suit having been filed on 01.04.2008 was thus not beyond limitation period. In the case of Ajabul Biswas (supra), it was held that once the Final Bill was not made final and payment was not made, the period of limitation could not be counted. What has been claimed in this suit is the amount illegally deducted by defendants; and claim of the plaintiff with regard to those deductions was rejected for the first time on 13.05.2008, so the suit filed on 01.04.2011 was well within time.
35. Further, as per clause 11 of the terms of contract Ex. P25, payment of Final Bill dated 15.03.2008, if the same had to be done by defendant no. 2, had to be done within 30 days i.e. by 14.04.2008. Even by this parameter, suit filed on 01.04.2011 was Suit no. 209619/2016 Page 31 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC perfectly within limitation period.
36. Consequently issue no. 3 is decided against defendant no. 2 and it is accordingly held not proved that this suit is barred by limitation.
ISSUES No. 4 & 5 (nonjoinder and other defects)
37. These issues were framed by the Hon'ble Single Judge of the Delhi High Court on the basis of preliminary objections in the written statement of defendant no. 2. But neither any elaborate pleadings were set up nor any evidence was led nor even any arguments were advanced on these issues.
38. Consequently, issues no. 4 and 5 are decided against defendant no. 2 and it is held not proved that the suit is barred by nonjoinder or acquiescence or waiver or resjudicata or estopple.
ISSUE No. 639. Onus of proof of this issue was on plaintiff. The total suit amount of Rs. 87,41,734/ has been explained by plaintiff in para 26 at page 23 of plaint by way of following table :
Suit no. 209619/2016 Page 32 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC Sr. Particulars of claim Amount (Rs.) Interest Amount No. with due date as on 15.03.2011
1. Outstanding as per Certificate 5,71,434.00 2,02,898.00 (Rs. 9,71,434/ less : received (30.03.2008) on 03.04.2008 Rs. 4,00,000)
2. Security deposited deducted 10,38,585.00 2,70,772.00 from RA Bills @5% (11.01.2009)
3. Amount against mobilization 12,00,000.00 4,86,838.00 of 2nd Rig Entry Pass dated (28.10.2007) 08.10.2007
4. Illegal deductions on account 16,52,242.00 5,86,659.00 of Reinforcement Steel (30.03.2008)
5. Illegal deductions on account 20,16,360.00 7,15,946.00 of M S Liner Plates (30.03.2008) Total 64,78,621.00 22,63,113.00 Although as discussed above, the different components of the suit amount enlisted above cannot be segregated as independent claims, for convenience, each component is being examined separately to ascertain the outstanding liability. Learned counsel for plaintiff took me through the entire documentary record and argued that on each of the said components, plaintiff has advanced cogent evidence therefore plaintiff cannot be denied the same. It was argued that there is no evidence that the security amount has already been refunded and there is clear evidence that second rig was mobilized and even put to use. As regards components pertaining to Suit no. 209619/2016 Page 33 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC deductions on account of reinforcement steel and liner plates, it was argued by learned counsel for plaintiff that despite there being no evidence of any wastage by plaintiff beyond permissible limits, defendants unilaterally deducted amounts on the pretext that surplus was not returned by plaintiff.
40. Learned counsel for defendant no. 1 argued that the entire liability is of defendant no. 2 as it is defendant no. 2 who did not lead any evidence at all. It was further argued on behalf of defendant no. 1 that PW1 admitted in his crossexamination that reinforcement steel and liner plates had been supplied free of cost by defendant no. 1, therefore, plaintiff cannot raise any claim in that regard. Besides, it was also argued that PW1 admitted that reconciliation of account had been done between plaintiff and defendant no. 2, therefore, defendant no. 1 has no liability.
41. Learned counsel for defendant no. 2 argued that since the second rig was mobilized under the instruction of defendant no. 1, it is defendant no. 1 only who should be held liable to pay. It was argued that according to specific pleadings of defendant no. 2, work assigned to it was not completed by plaintiff, therefore, there is no question of return of security amount. It was argued that it was plaintiff's responsibility to account for the shortfall in steel and Suit no. 209619/2016 Page 34 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC plates, so deduction on these heads was valid. As regards computation formula, learned counsel for defendant no. 2 sought to place reliance on the general conditions of contract Mark PW1/54 which was strongly opposed by learned counsel for plaintiff pointing out that the same is not a proved document, so cannot be read.
42. Argument on behalf of defendant no. 2 that plaintiff did not complete the assigned work has to be rejected because not even a shred of evidence was adduced on behalf of either of the defendants to establish this. Not only this, there are not even specific pleadings of either of the defendants disclosing the extent of work which was allegedly left incomplete and cost allegedly spent by either of the defendants to get the said incomplete work completed from someone else. Even in any of the correspondence between the parties, there was no such allegation that plaintiff did not complete work assigned to it. Had the plaintiff not completed the assigned work, defendant no. 2 would not have certified the Final Bill dated 15.03.2008, which is a part of document Ex. P15. Most importantly in its letter Ex. P15, defendant no. 2 specifically expressed that plaintiff had submitted 10th and Final Bill after completion of work.
Suit no. 209619/2016 Page 35 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC
43. The document Ex. P15 is the letter addressed by defendant no. 2 to defendant no. 1, transmitting the duly certified Final Bill dated 15.02.2008, as per which the net payable amount even according to defendant no. 2 was Rs. 9,71,434/. Admittedly, out of the said net payable amount, plaintiff was paid only a sum of Rs. 4,00,000/ by way of last payment cheque dated 03.04.2008. Therefore, even according to defendant's own computation, out of net payable amount a sum of Rs. 5,71,434/ is due and payable.
44. As regards the second component of the suit amount, the same was security deposit deducted from RA Bills at a rate of 5%. It is nobody's case that no security amount was deducted from RA Bills or that the security amount has already been refunded. Resistance to refund of security amount is solely on the ground that plaintiff did not complete the awarded work. But as already discussed above, there is not even iota of evidence to support this bald resistance on behalf of defendants. Further, as mentioned above, even in the voluminous documentary communication between the parties on record, there is not a whisper that security amount was being forfeited by defendant no. 2. As regards the totality of amount deducted towards security deposit from RA Bills, there is no dispute. Therefore, plaintiff cannot be denied refund of the security amount of Rs. 10,38,585/.
Suit no. 209619/2016 Page 36 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC
45. Third component of the suit amount is cost of mobilization of second rig. As mentioned above, in order to expedite completion of project, in the meeting dated 02.08.2007, plaintiff was called upon to mobilize second rig. None of the correspondence on record suggests that second rig had not been mobilized. Neither of the defendants also led any evidence to show that they ever alleged that second rig was not mobilized. The document Ex. P2 is a returnable gate pass dated 18.09.2007 reflecting mobilization of the second rig from Panipat site of plaintiff to Korba site of defendants. Further, document Ex. P9 is a letter dated 15.10.2007 addressed by plaintiff to defendant no. 1, specifically pointing out that second rig had reached Korba in two consignments dated 25.09.2007 and 06.10.2007 so defendant no. 1 was called upon to release payments in accordance with meeting dated 02.08.2007 to plaintiff. The said letter was followed by letter dated 06.10.2007 Ex. P10 and letter dated 30.10.2007 Ex. P16, reiterating mobilization of the second rig. But in response to those three letters, neither of the defendants claimed that it was being falsely alleged that second rig has been mobilized. Rather, in letter dated 01.11.2007 Ex. P17 addressed by defendant no.1 to plaintiff, it was assured that defendant no. 1 would honour its commitment as per meeting dated 02.08.2007. Even thereafter, across the period till 17.04.2008, there was multiple correspondence sent by plaintiff Suit no. 209619/2016 Page 37 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC to the defendants, claiming the amount pertaining to second rig but there was no dispute as regards mobilization of second rig. Even in letter Ex. D5, dispatched on 26.04.2008 to plaintiff, there is not even a whisper from defendant no.1 that second rig has not been mobilized and rather a copy of that letter was sent to defendant no. 2 observing it to be a serious matter and calling upon defendant no. 2 to clear the bills. Even defendant no. 2 in its letter Ex. P15 dated 13.05.2008 while refuting the claims of plaintiff did not whisper that second rig had not been mobilized. There is absolutely no basis to suspect that second big was not mobilized. The quantification of cost of mobilization of second rig is not under challenge. Therefore, plaintiff cannot be denied a sum of Rs. 12,00,000/ towards cost of mobilization of second rig.
46. Fourth and fifth components of the suit amount are the amount deducted illegally on account of reinforcement steel and on account of MS liner plates. Document Ex. P26 running into two sheets (pages 7879 of documents) is a debit note issued by defendant no. 2 pertaining to liner plates and reinforcement steel, which was communicated by defendant no. 2 to defendant no. 1 alongwith certification of 10th Final Bill by way of letter Ex. P15. The said debit note pertaining to liner plates and reinforcement steel issued by defendant no. 2 reflected the basis on which a sum of Rs.
Suit no. 209619/2016 Page 38 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC 16,52,242/ towards reinforcement steel and a sum of Rs. 20,16,360/ towards liner plates was deducted, alleging wastage of the said material beyond permissible limits. The said debit note was based on accounts reconciliation statement dated 07.02.2008, which was signed by not just defendant no. 2 but even plaintiff. Plaintiff has tried to challenge that debit note without leading any concrete evidence. In para 15 of the plaint, it is pleaded that plaintiff was forced to sign the reconciliation statement by defendant no. 2 on the assurance of releasing pending payments. Admittedly, in entire correspondence after 07.02.2008, there was not even a whisper from plaintiff that it had been coerced to sign that reconciliation statement nor any complaint before any authority was lodged on behalf of plaintiff regarding these allegations. On the contrary, in his crossexamination, PW1 categorically admitted that he did not write any letter to even plaintiff company alleging that he had been coerced to sign joint reconciliation statement. PW1 also admitted in his crossexamination that plaintiff had been supplied steel and plates free of costs and that deductions on account of reinforcement steel and on account of liner plates was done in accordance with the contract between the plaintiff and defendant no. 2. That being so, in my view, plaintiff cannot claim the money deducted on account of reinforcement steel and MS liner plates so fourth and fifth components of suit amount are liable to be declined.
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47. Presuit interest on first three components of the suit amount, as enlisted on page 23 of plaint claimed by plaintiff is not supported by any agreement between the parties nor justified by any pleadings or evidence led in that regard, so the same cannot be claimed by plaintiff.
48. Then comes the question of liability to pay. According to plaintiff, defendants are jointly and severally liable to pay the outstanding amount since by way of Ex. P1, minutes of meeting dated 02.08.2007 defendant no. 1 had undertaken to make payments directly to plaintiff provided the bills were certified by defendant no.
2. Resistance of defendant no. 1 is on the ground that vide Ex. P1, defendant no. 1 had agreed to make direct payments provided the second rig was mobilized within 15 days but the same was not done.
49. The minutes of meeting dated 02.08.2007 read in its entirety would reflect that the said tripartite meeting was convened to examine the circumstances which were causing delay in completion of project and in the course of the said meeting, plaintiff explained that the delay in completion of project was due to delay in release of payments, so the parties agreed that for the work done after 24.06.2007, defendant no. 1 would make payments directly to Suit no. 209619/2016 Page 40 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC plaintiff provided plaintiff mobilized second rig in order to expedite the work and plaintiff expressed that "they are ready for mobilization of second rig from Panipat which is expected to reach Korba within 15 days". The date of 24.06.2007 was till which date 5th RA Bill had been raised. In other words, for payments subsequent to 5th RA Bill, defendant no. 1 had assured to make direct payments to plaintiff provided defendant no. 2 certified the bills. I am unable to accept the argument advanced on behalf of defendant no. 1 that liability of defendant no. 1 could arise only if the second rig was mobilized within 15 days. Liability of defendant no. 1 to make direct payment was dependent only upon certification of bills by defendant no. 2 and mobilization of second rig by plaintiff. The period of 15 days for the second rig to reach Korba was clearly only an expected period and had no connection with the payments to be made directly by defendant no. 1. Since the second rig was mobilized at request of defendant no. 1 and even put to use for completion of project, ultimate beneficiary whereof was defendant no. 1 only, as such defendant no. 1 cannot avoid liability to pay.
50. In view of above discussion, issue no. 6 is decided in favour of plaintiff and it is accordingly held proved to the effect that plaintiff is entitled to recover a total sum of Rs. 28,10,019/ Suit no. 209619/2016 Page 41 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC (Rs.5,71,434/ towards outstanding bill + Rs. 10,38,585/ towards refund of security deposit + Rs. 12,00,000/ towards mobilization of second rig) and both defendants are jointly and severally liable to pay the said amount to plaintiff.
ISSUE No. 7 (Pendente lite and Future Interest)
51. Plaintiff has claimed pendente lite and future interest at a rate of 12% per annum on the suit amount. On the aspect of the issue under consideration, neither side addressed any argument.
52. In a chain of judgments, reported as Rajendra Construction Co. vs Maharashtra Housing & Area Development Authority, (2005) 6 SCC 678; McDermott International Inc. vs Burn Standard Co. Ltd., (2006) 11 SCC 181; and State of Rajasthan vs Ferro Concrete Construction Pvt. Ltd., (2009) 3 Arb. LR 140 (SC), the Hon'ble Supreme Court of India mandated that courts must reduce the high rates of interest on account of the consistent fall in the rates of interest in changed economic scenario.
53. The rate of 12% for pendente lite and future interest as claimed by plaintiff is on higher side. Going by the overall Suit no. 209619/2016 Page 42 of 43 pages Paresh Constructions & Foundation Pvt. Ltd. vs NTPC circumstances of this case in the light of above quoted law, simple interest pendente lite and future at a rate of 7% per annum on the decretal amount would be fair and appropriate.
54. Issue no. 7 is decided in favour of plaintiff and it is accordingly held that plaintiff is entitled to simple interest at a rate of 7% per annum pendente lite and future on the decretal amount.
ISSUE No. 8 (Relief)
55. In view of above findings, suit of plaintiff succeeds and is decreed with cost against the defendants jointly and severally for a sum of Rs. 28,10,019/ (Rupees Twenty Eight Lakhs Ten Thousand and Nineteen only) with pentente lite and future simple interest thereon at a rate of 7% per annum.
56. Decree sheet be accordingly drawn. File be consigned to records.
Announced in the open court on
this 19th day of November, 2018 (GIRISH KATHPALIA)
District & Sessions Judge
Digitally signed
by GIRISH South East, Saket Courts
GIRISH New Delhi 19.11.2018 (a)
KATHPALIA
KATHPALIA Date:
2018.11.20
14:44:22 +0530
Suit no. 209619/2016 Page 43 of 43 pages
Paresh Constructions & Foundation Pvt. Ltd. vs NTPC