Delhi High Court
M/S Graphisads Private Limited vs South Delhi Municial Corporation on 11 October, 2022
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
NEUTRAL CITATION NO: 2022/DHC/004463
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 11.10.2022
+ LPA 99/2019, CM APPLs.2282/2022 and 2861/2022
M/S GRAPHISADS PRIVATE LIMITED ......Appellant
Through: Mr Nitin Mittal, Advocate.
versus
SOUTH DELHI MUNICIAL CORPORATION ......Respondent
Through: Mr Sanjay Poddar, Sr. Advocate with
Ms Sakshi Popli, Standing Counsel
with Mr Pratish Goel, Mr Sachin
Bhatt and Mr Kalyan Babu Singh,
Advocates.
CORAM:
HON'BLE MR JUSTICE RAJIV SHAKDHER
HON'BLE MS JUSTICE TARA VITASTA GANJU
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J.: (ORAL)
1. This appeal is directed against the judgment of the learned Single Judge dated 01.06.2018.
2. Notice in this appeal was issued by a coordinate Bench of this Court on 13.08.2019, while delay in filing the appeal was condoned by the very same Bench on 06.11.2019.
3. Although opportunity was given to file a reply to the appeal, no reply has been filed on behalf of the respondent/South Delhi Municipal Corporation ("SDMC").
4. However, what is not in dispute, is that the appellant/Company was blacklisted on 12.06.2015.
5. Mr Sanjay Poddar, learned senior counsel, who appears on behalf of Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 1 of 9 Signing Date:27.10.2022 17:32:25 NEUTRAL CITATION NO: 2022/DHC/004463 the respondent/SDMC, fairly concedes, that the blacklisting order does not have an end date.
6. According to us, this is contrary to the decision rendered by the Supreme Court in Kulja Industries Ltd. v. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Ltd. and Ors., (2014) 14 SCC 731.
7. That being said, both Mr Poddar as well as Mr Nitin Mittal, who appears on behalf of the appellant/Company submit, that they are willing to move forward, and have the issue concerning outstanding dues payable by the appellant/Company resolved.
7.1 This position has been taken by the counsel for the parties, as, even if, we were to set aside the blacklisting order, on the ground that it does not have an end date, we would have to remand the matter to the respondent/SDMC for a de novo exercise.
7.2 This, according to both Mr Poddar and Mr Mittal, will keep the dispute alive.
8. Therefore, it is in this light, that the respondent/SDMC has made the following offer, with regard to the dues payable by the appellant/Company concerning two contracts which are in issue i.e., Parking Media Contract and Street Furniture Cluster No.2 Contract.
8.1 According to the respondent/SDMC, the amounts due vis-à-vis the Parking Media Contract are as mentioned in the following table:
Table-A:Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 2 of 9 Signing Date:27.10.2022 17:32:25
NEUTRAL CITATION NO: 2022/DHC/004463 PARKING MEDIA M/s Graphisads (P) Limited DUES ABSTRACT UP TO AUGUST 2022 Period of Contract S Name Site of Principal Interest Interest (for Advt. From To Total Remarks . Locations (for the the period Tax.
N period upto August
o upto the 2022) to be
. period of referred to
contract Arbitration
(A) (B)
1 2 Unipole at 16,34,716 4,42,450 31,84,517 2,460 07.12.2009 06.12.2014 48,21,693 10% Increase
Tilak Nagar from start of
4th Year & 5th
Year
2 2 Signage at 18,15,194 5,72,542 37,84,168 1,980 15.05.2009 14.05.2014 56,01,342 10% Increase
Janak Parlour each year
to Raja
Garden
3 10 Signage at 4,08,977 1,53,335 9,17,034 2,460 07.12.2009 31.03.2014 13,28,471 10% Increase
Tilak Nagar (Site each year
Mkt. Cancelled)
4 14 Flag -63,000 - - - - - -63,000 Not Installed
Signage at w.e.f. Date of
Tilak Nagar allotment
5 4 Signage at 10,15,779 2,34,680 20,11,242 2,460 15.05.2009 14.05.2014 30,29,481 10% Increase
Basankt Lok, each year
Complex
(Priya) and 2
Signage are
Removed
6 2 Unipole at 65,13,639 17,10,385 1,29,22,869 1,968 07.12.2009 18.11.2014 1,94,38,476 10% Increase
Vasant Lok (Site from start of
Complex, Cancelled) 4th Year & 5th
Vasant Vihar Year
7 20 Flag -7,65,515 16,421 16,421 1,968 26.05.2010 18.11.2014 -7,47,126 10% Increase
Signage at (Site each year
Basant Lok Cancelled)
Total 1,05,59,79 31,29,813 2,28,36,251 13,296 3,34,09,337
Amount 0
Signature Not Verified
Digitally Signed By:VIPIN
KUMAR RAI
LPA No.99/2019 Page 3 of 9
Signing Date:27.10.2022
17:32:25
NEUTRAL CITATION NO: 2022/DHC/004463 1 Principal Upto Contract 1,05,59,790 2 Interest upto Contract Period 2,28,36,251 3 Advertisement Tax 13,296 Total Upto Contract 3,34,09,337 1 Payment on Account vide G8 No.71081 dated 50,00,000 13.06.2018 2 Payment on Account vide G8 No.59483 dated 1,41,130 25.10.2021 Total Payment made after contract period 51,41,130 Dues against the firm upto August 2022 S. Dues Details Upto June Due Paid on Account Paid Balance No. 2022 1 MLF/Principal 1,05,59,790 50,00,000 1,41,130 54,18,660 2 Interest (A+B) 2,59,66,064 - - 2,59,66,064 3 Advt. Tax 13,296 - - 13,296 Total 3,65,39,150 50,00,000 1,41,130 3,13,98,020
9. Likewise, as per the respondent/SDMC, insofar as Street Furniture Cluster No.2 Contract is concerned, the amounts payable by the appellant/Company are mentioned in the following table:
Table-B:
Street Furniture Cluster No.2, IGI Stadium & Jawaharlal Nehru Sports Complex, & Cluster No.3 R.K. Khanna Tennis Complex DUES ABSTRACT UPTO AUGUST 2022 (10,83,450/-) S. Name Contract Princip Interest Surcharge Advt. Princi Interest for Surcharge Total N Site of Period al at the (for the 5% as per Tax pal as the period for the o. Locatio time of period upto terms & on beyond the period ns Comple the period conditions date completion beyond the Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 4 of 9 Signing Date:27.10.2022 17:32:25 NEUTRAL CITATION NO: 2022/DHC/004463 tion of of upto the of Contract completion Contrac contract) period of to be of Contract t Contract refered to to be Arbitrator referred to Arbitrator 1 Cluster 15.10.2010 to 56,81,4 28,19,500 44,88,461 35,640 38,16 27,00,07 46,80,656 1,85,41 No.2, 28.08.2017 37 ,987 1 ,315 IGI (contract Stadiu terminated by m & the Jawaha Department on rlal 16.06.2017) Nehru Sports Comple x & Cluster No.3 R.K. Khanna Tennis Comple x Total 28,19,500 44,88,461 35,64 38,16 27,00,071 46,80,656 1,85,41 Amoun 0 ,987 ,315 t 1 Principal as on 28.08.2017 56,81,437 i.e., Up to Contract Period 2 Interest as on 28.08.2017 28,19,500 i.e., Up to Contract 3 Surcharge @ 5% per 44,88,461 annum as on 28.08.2017 i.e., Up to Contract Period 4 Advertisement Tax 35,640 Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 5 of 9 Signing Date:27.10.2022 17:32:25 NEUTRAL CITATION NO: 2022/DHC/004463 Total 1,30,25,038 1 Payment paid vide G8 No. 10,83,450 358 & 359 dated 25.09.2017 2 Payment paid vide G8 7,81,000 No.59484 dated 25.10.2021 TOTAL DUES AGAINST THE FIRM Principal 38,16,987 Interest as on 28.08.2017 i.e., Up to 28,19,500 Contract Period Surcharge @ 5% per annum as on 44,88,461 28.08.2017 i.e., Up to Contract Period Interest after 28.08.2017 27,00,071 Surcharge @ 5% per annum after 46,80,656 28.08.2017 Advt. Tax 35,640 Total 1,85,41,315
10. It would be evident, that insofar as the details given in Table-A above are concerned, the respondent/SDMC has sought not only the payment of the principal amount, but also amounts towards interest and advertisement tax.
11. Mr Mittal, on instructions of Mr Mukesh Gupta, Director of the appellant/Company, says that the appellant/Company would pay the principal amount, which is pegged at Rs. 54,18,660/-, as also the advertisement tax, which is crystallized as Rs. 13,296/-.
Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 6 of 9 Signing Date:27.10.2022 17:32:25NEUTRAL CITATION NO: 2022/DHC/004463 11.1 Insofar as interest is concerned, Mr Mittal, once again on instructions, says that the appellant/Company is willing to pay interest at the rate of 8% (simple), instead of 24%, as calculated by the respondent/SDMC.
12. We are of the view, that given the fact that the dispute has remained unresolved for quite some time, and the appellant/Company has been impacted, as contended by them, on account of COVID-19, it seems both fair and just, that interest is charged at a reasonable rate, having regard to the fact that interest rates on deposits have fallen considerably. 12.1 Furthermore, as things stand today, interest rates on loans extended by banks are not as high as 24%, as claimed by the respondent/SDMC qua the appellant.
13. Accordingly, interest will be calculated at the rate of 8% per annum (simple).
14. As indicated above, the principal amount and the advertisement tax will be paid, as calculated by the respondent/SDMC, as shown in Table-A above.
15. As far as the other contract is concerned, it has four components, which are, broadly, indicated in the Table-B above. 15.1 The principal amount claimed by the respondent/SDMC is Rs. 38,16,987/-. Likewise, advertisement tax amounting to Rs. 35,640/- is also claimed by the respondent/SDMC.
15.2 Besides this, the respondent/SDMC has also claimed monies towards surcharge and interest.
16. Insofar as interest is concerned, for the very same reason as indicated hereinabove with regard to the Parking Media Contract, we are of the view that interest at the rate of 8% per annum (simple) should strike an equitable Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 7 of 9 Signing Date:27.10.2022 17:32:25 NEUTRAL CITATION NO: 2022/DHC/004463 balance, with regard to the rights of both parties. 16.1 Therefore, the respondent/SDMC will calculate interest at the rate of 8% per annum (simple).
17. We may also note, that in this case as well, Mr Mittal, on instructions, has indicated to us, that the principal amount and advertisement tax, as shown in Table-B will be paid, along with interest, at the rate of 8% per annum (simple).
18. Insofar as payment of surcharge is concerned, it is the submission of Mr Mittal, that it has attributes of penalty. 18.1 Mr Poddar says, that the respondent/SDMC will revisit this issue.
19. Mr Poddar also submits, that if it is found that the surcharge has attributes of penalty, the same will be waived. 19.1 The statement made by Mr Poddar is taken on record.
20. In case the respondent/SDMC were to conclude, that the surcharge has not been demanded on account of non-payment of dues, and therefore is payable by the appellant/Company, parties agree, that they will take recourse to the arbitration mechanism set forth in the contract, for the purpose of surcharge.
21. Mr Mittal says, that the agreed amounts, as indicated hereinabove, both for the Parking Media Contract, as well as the Street Furniture Cluster No.2 Contract will be paid within the next six weeks. 21.1 The statement made by Mr Mittal is taken on record.
22. Immediately upon payment of the agreed amount, the respondent/SDMC will recall the blacklisting order.
23. Accordingly, the impugned order is set aside, given the agreement arrived at between the parties.
Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 8 of 9 Signing Date:27.10.2022 17:32:25NEUTRAL CITATION NO: 2022/DHC/004463
24. The appeal is disposed of in the aforesaid terms.
25. Needless to add, once the agreed amounts are paid, the blacklisting order dated 12.06.2015 will not come in the way of the appellant/Company being considered for award of contracts in future.
26. Pending applications shall stand closed.
(RAJIV SHAKDHER) JUDGE (TARA VITASTA GANJU) JUDGE OCTOBER 11, 2022 / tr Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI LPA No.99/2019 Page 9 of 9 Signing Date:27.10.2022 17:32:25