Calcutta High Court
Mrt Signals Limited vs Src Company Infra Pvt. Ltd on 25 November, 2025
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
Presents
The Hon'ble Justice Krishna Rao
C.S. (COM) No. 759 of 2024
MRT Signals Limited
Versus
SRC Company Infra Pvt. Ltd.
Mr. Satadeep Bhattacharya
Mr. Uttam Sharma
Ms. Vrinda Kedia
... For the plaintiff.
Hearing Concluded On : 28.10.2025
Judgment on : 25.11.2025
Krishna Rao, J.:
1. The plaintiff has filed the present suit against the defendant for recovery of an amount of Rs. 44,23,700/- along with interim interest and interest upon judgment at the rate of 18% per annum.
2. The plaintiff is engaged in the business of manufacturing, supplying and commissioning of railway signalling equipments and has acquired 2 substantial reputation and goodwill in India considering the quality of the equipments which are manufactured and supplied by the plaintiff.
3. The defendant is engaged in the business of construction work.
4. The defendant sometimes on or around the first week of October, 2020, had approached the plaintiff for work of alteration in existing electronic interlocking system at Bevara Railway Station.
5. The plaintiff relying upon the offer of the defendant had submitted an offer, wherein the plaintiff had offered to carry out the works at an amount of Rs.1,04,00,000/- alongwith certain terms and conditions, by way of an email dated 8th October, 2020.
6. The defendant had accepted the offer and had, accordingly, sent an email dated 9th October, 2020, enclosing a Work Order.
7. The plaintiff vide an email dated 15th October, 2020, had requested the defendant to revise few terms of the Work Order, which was subsequently revised and by an email dated 16th October, 2020, the defendant issued a revised Work Order, in respect of which a contract was entered into between the parties.
8. The plaintiff upon making the required materials ready for inspection, by emails dated 28th October, 2020 and 29th October, 2020, called upon the defendant for issuance of Call Letter upon RDSO for inspection of such materials pursuant to which the defendant on 2nd 3 November, 2020, by an email forwarded the plaintiff, the signed Call Letter for inspection to be issued to RDSO for further process.
9. The defendant had engaged the services of one M/s. RCC Infra Consultants Pvt. Ltd., as a consultant in respect of the said works. Since, the said consultant was not registered with the North Central Railway, i.e. the Railway Division under whose jurisdiction, Bevara Railway Station is situated, RDSO did not take into consideration the call letter for inspection, and therefore refused to carry out inspection of the materials.
10. The plaintiff on 11th November, 2020, received a letter dated 10th November, 2020, issued by the North Central Railway to RCC, approving its engagement as a consultant in respect of the said project with a validity from 10th November, 2020 to 8th February, 2023. Thereafter on 12th November, 2020, a revised Call Letter was issued to RDSO for carrying out inspection of the said materials.
11. In terms of the revised contract, the time period for completion of the works was 30th November, 2020, since RDSO was not in a position to carry out the inspection of the materials within the tenure of the contract, the plaintiff by a letter dated 27th November, 2020, requested the defendant to extend the time for completion of the works till 15th January, 2021.
12. The defendant by a letter dated 2nd December, 2020, had extended the time period for completion of the said works till 15th January, 2021, 4 without invoking Liquidated Damages (LD) Clause as contained in the Contract.
13. On 8th December, 2020 to 14th December, 2020, the inspection of the required materials could be carried out by the RDSO, and subsequently upon inspection the RDSO had issued an Inspection Certificate dated 15th December, 2020.
14. The plaintiff after the inspection, had duly supplied the required materials to the said railway station for the purpose of carrying out the installation works thereat, in respect of which the plaintiff on 21st January, 2021, had raised invoices being 1st and 2nd RA bills amount to Rs.72,56,456/- and Rs.12,03,226/-.
15. The defendant upon receipt of such invoices had made payment for an aggregated sum of Rs.84,43,567/-.
16. The service building which was required to be made available to the plaintiff to enable the plaintiff for carrying out indoor works in terms of the contract were not even ready after a lapse of 4 ½ months from the date of issuance of the Work Order, which in turn had resulted in the plaintiff not being able to commence the installation and commissioning works thereat. Accordingly, the plaintiff vide an email dated 2nd March, 2021, requested the defendant to ensure the plaintiff to carry out such works.
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17. The defendant thereafter vide an email dated 5th March, 2021, informed the plaintiff, for the first time that the required service building and store rooms were ready for indoor works and the plaintiff can commence the same.
18. While the works were being carried out several meetings were held between the representatives of the plaintiff, the defendant and the consultant, RCC on 7th May, 2021 and on 28th May, 2021. Even in course of such meetings, no dispute was raised by the defendant in respect to the pace at which the said works were being carried out by the plaintiff, whereas the defendant was fully aware of the delay, in completion of the said works.
19. By an email and a letter both dated 4th June, 2021, the plaintiff requested the defendant for further extension of time for completion of the contract till 30th August, 2021, without invoking of Liquidated Damages Clause.
20. The defendant although did not give a written reply to the plaintiff's email and letter dated 4th June, 2021, but by its contemporaneous conduct, the defendant had treated the contract to have been extended without invocation of any Liquidated Damages.
21. The plaintiff states that the works in terms of the contract were completed and on 26th September, 2021, accordingly, a Completion/Safety Certificate in respect thereof was issued by the North Central Railway Authorities.
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22. After successful completion of the contract and commissioning of all the works, the plaintiff had raised bill upon the defendant to the tune of Rs. 30,23,518/- inclusive of TDS to the tune of Rs.53,991/-.
23. The defendant on 26th September, 2022, had paid the TDS amounting to Rs.53,991/- and had uploaded the same in their TDS Return which thereafter had reflected in Form-26AS of the plaintiff. However, the defendant had failed or neglected to make payment of the sum of Rs.29,69,527/- in terms of the bill raised by the plaintiff.
24. The plaintiff by way of several e-mails, called upon the defendant to make payment of Rs.29,69,527/- but the defendant failed to make the payment. On 30th August, 2023 by a letter had once again called upon the defendant to make payment of the outstanding dues along with interest at the rate of 18% per annum.
25. The plaintiff before filling of the suit, on 22nd February, 2024, has initiated pre-institution mediation process but inspite of receipt of notice, the defendant did not appear before the mediation and non- starter report dated 21st May, 2024, was issued by the Mediation Centre on 25th June, 2024.
26. Writ of summons was duly served upon the defendant through Bailiff as well as postal service on 16th October, 2024 and on 13th September, 2024 respectively, even after service of notice, the defendant has not entered appearance in the suit. The plaintiff has obtained report issued form the Deputy Registrar, Legal, dated 18th January, 2025, wherein it 7 reveals that the defendant has not entered appearance till 18th January, 2025, either in person or through any legal representatives, therefore, the matter was directed to be listed as an "Undefended Suit"
by an order dated 24th January, 2025.
27. The plaintiff in order to prove its case has examined one witness, namely, Mr. Manas Gupta, Senior Executive of the plaintiff company, and has exhibited several documents which were marked as "Exhibit- A to Exhibit- BB":
Exhibit-A : Original Board Resolution dated 24th July, 2024.
A/1 and A/2: signature of Mr. Mahendra Kumar Anchalia is appearing in the Board Resolution is marked as A/1 and signature of the Director, Mr. Ankit Anchali is appearing in the Board Resolution is marked as A/2.
Exhibit - B (Collectively) : Copy of an e-mail dated 8th October, 2020, issued at 20:56 hours by the plaintiff to the defendant, enclosing the Revised Work Order.
Exhibit - C: Copy of an e-mail dated 9th October, 2020 along with the Work Order issued in favour of the plaintiff.
Exhibit - D: Copy of an email dated 15th October, 2020, issued by the plaintiff to the defendant requesting the defendant to revise few terms of the Work Order.8
Exhibit- E (Collectively) : Copy of an e-mail dated 16th October, 2020, issued by the defendant to the plaintiff enclosing a revised Work Order revising the terms of the Work Order dated 9th October, 2020.
Exhibit - F: Copy of an e-mail dated 28th October, 2020, issued by the plaintiff to the defendant.
Exhibit - G: Copy of an e-mail dated 29th October, 2020, issued by the plaintiff to the defendant.
Exhibit - H (Collectively) : Copy of an email dated 2nd November, 2020, issued by the defendant to the plaintiff, forwarding the signed call letter for inspection to be issued to RDSO for further process.
Exhibit - I: Copy of an e-mail dated 5th November, 2020, issued by the plaintiff requesting the defendant to provide a letter from the North Central Railway authorities informing the fact that RCC was appointed as a official consultant in respect of the said works.
Exhibit- J (Collectively) : Copy of a letter dated 10th November, 2020, issued by the Deputy Chief Engineer of North Central Railway to RCC, approving its engagement as a consultant in respect of the said project.
Exhibit - K: Copy of revised call letter, dated 12th November, 2020, issued in favour of the RDSO by RCC.9
Exhibit - L: Copy of a letter dated 27th November, 2020, issued by the plaintiff to the defendant, requesting the defendant to extend the time for completion of works.
Exhibit - M: Copy of a letter dated 2nd December, 2020, issued by the defendant, extending the time period for completion of works as per the request of the plaintiff.
Exhibit- N (Collectively) : Original inspection certificate, dated 15th December, 2020, approved and issued by RDSO, in favour of the plaintiff, confirming the quality of the materials to be proper and useable.
Exhibit- O (Collectively) : Copy of an e-mail dated 4th February, 2021, issued by the plaintiff to the defendant, raising 1st RA Bill.
Exhibit-P (Collectively) : Copy of an e-mail dated, 12th February, 2021, enclosing the 2nd RA Bill dated 21st January, 2021, issued by the plaintiff to the defendant.
Exhibit - Q (Collectively) : The original bank statement of the State Bank of India dated 19th March, 2021 and 3rd May, 2021.
Q/1 and Q/2: Entries which are encircled by P.W.1 are marked as Exhibit Q/1 and Q/2 respectively.
Exhibit - R: Copy of an e-mail dated 2nd March, 2021, issued by the plaintiff to the defendant 10 requesting that the service building which was required to be made available to the plaintiff.
Exhibit- S: Copy of an e-mail dated 5th March, 2021, issued by the defendant, informing the plaintiff that the required service building and store rooms were ready for indoor works.
Exhibit- T: Copy of the Minutes of the Meeting dated 7th May, 2021, held between the representatives of the plaintiff, the defendant and the consultant and RCC.
Exhibit- U: Copy of an e-mail dated 4th June, 2021, communicating the Minutes of the Meeting dated 28th May, 2021.
Exhibit- V (Collectively) : Copy of an e-mail dated 4th June, 2021, issued by the plaintiff to the defendant, requesting the defendant for further extension of time for completion of the contract.
Exhibit- W: Copy of a Certificate dated 26th September, 2021, issued by the North Central Railway Authorities, in terms of the completion of the contract.
Exhibit- X (Collectively) : Copy of an e-mail dated 7th October, 2021, issued by the plaintiff to the defendant, raising a bill dated 5th October, 2021, to the tune of Rs.30,23,518/-
Exhibit - Y: A copy of Annual Tax Return (Form 26AS ) of the plaintiff containing details of TDS.11
Y/1 : The entry of TDS deducted by the defendat, encircled in red ink is marked as Exhibit Y/1.
Exhibit - Z (Collectively) : Copies of several e- mails dated from 20th April, 2022 to 23rd February, 2023, issued by the plaintiff to the defendant, repeatedly calling upon the defendant to make payment of the due amount.
Exhibit - AA (Collectively) : Copy of a letter dated 30th August, 2023, issued by the plaintiff to the defendant once again calling upon the defendant to make payment of the due amount.
Exhibit - BB: Copy of Schedule containing
particulars of the interest payable by the
defendant.
28. Taking into consideration of the evidence of the plaintiff and the documents relied by the plaintiff, this Court finds that the plaintiff has proved that in the month of October, 2020, the defendant approached the plaintiff for work of alteration in existing electronic interlocking system at Bevara Railway Station. Upon negotiations held betwwen the parties, the defendant has issued a work order to the plaintiff on 9th October, 2020 which is marked as "Exhibit-C". Subsequently, on 16th October, 2020, the work order was modified which is marked as "Exhibit- E (Collectively)". On 28th October, 2020 and 29th October, 2020, the plaintiff has requested the defendant for issuance of Call Letter upon RDSO for inspection of materials. On 2nd November, 2020, the defendant forwarded the signed Call Letter for inspection to be 12 issued to RDSO. On 10th November, 2020, the North Central Railway issued a letter to RCC, approving its engagement as a Consultant but subsequently, again on 12th November, 2020, a letter was issued to RDSO for carrying out inspection of the materials of the plaintiff. The said documents were marked as "Exhibit- F, Exhibit- G, Exhibit- H (Collectively), Exhibit- J (Collectively) and Exhibit- K".
29. As there was delay in inspection of the materials, the plaintiff has issued letter dated 27th November, 2020, requesting the defendant to extend the time for completion of the said works. By a letter dated 2nd December 2020, the defendant has extended the time for completion of work till 15th January, 2021. The said documents were marked as "Exhibit- L" and "Exhibit- M". On completion of such inspection, the RDSO issued Certificate dated 15th December, 2020 to the plaintiff certifying the materials were as per required specifications. The Certificate is marked as "Exhibit- N (Collectively)".
30. After supply of materials by the plaintiff to the defendant, the plaintiff has raised running account bills no.1 and 2 for an amount of Rs.
72,56,456/- and Rs. 12,03,226/-. Upon receipt of the running account bills, the defendant has paid an amount of Rs. 84,43,567/-. The documents were marked as "Exhibit- P (Collectively) and Exhibit- Q (Collectively)". By a letter dated 2nd March, 2021, the plaintiff requested the defendant for handing over the service building to the plaintiff for the purpose of carry out indoor works and on 5th March, 2021, the defendant informed the plaintiff that the service building and 13 store rooms are ready for completing indoor works. The documents were marked as "Exhibits - R and S".
31. During execution of indoor works by the plaintiff, several meetings were held between the parties and the Minutes of the Meeting was also recorded. Though the time for completion of the work was completed on 15th January, 2021 but the plaintiff was continued with the work and also requested for extension of time till 30th August, 2021, by an email dated 4th June, 2021. On 26th September, 2021, the work was completed in all aspect and the North Central Railway issued completion/ safety certificate to the plaintiff. The request for extension of time and Completion Certificate are marked as "Exhibits- V (Collectively) and Exhibit- W".
32. On completion of work, the plaintiff has raised final bill to the tune of Rs. 30,23,518/- on 5th October, 2021, which was inclusive of TDS and on receipt of the bill, the defendant has paid the TDS amount of Rs. 53,991/- and uploaded in their TDS Return and the said amount also reflected in Form 26AS of the plaintiff. The bill of the plaintiff is marked as "Exhibit- X (Collectively)". TDS deducted by the defendat is marked as "Exhibit- Y/1" and 26-AS Certficate is marked as "Exhibit- Y". The defendant has paid TDS amounting to Rs.53,991/- but the defendant has not paid the bill amount to the plaintiff inspite of serval requests made by the plaintiff.
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33. Though the plaintiff has not completed the work within the extended time but the plaintiff has made request to the defendant for extension of time to complete the work. The defendant has received the request of the plaintiff but has not rejected the request of the plaintiff but on the other hand allowed the plaintiff to complete the work and on completion of the work, the North Central Railway issued completion/safety certificate. The defendant has also not disputed the bill raised by the plaintiff on completion of the work as the defendant has paid the TDS.
34. In the case of Bhagawati Oxygen Ltd. Vs. Hindustan Copper Ltd. reported in (2005) 6 SCC 462, the Hon'ble Supreme Court held that:
"20. Now, the arbitrator has considered the contentions of both the parties. He observed that as per the contract, BOL had undertaken to provide a VIST for storage of liquid oxygen of 50,000 litres. It was not disputed that VIST was not established by BOL and there was no provision for storage of liquid oxygen. He, however, observed that HCL neither insisted for establishing VIST nor objected for not establishing it.
21. Regarding purity of oxygen, the arbitrator observed that HCL never complained regarding the fall of purity of oxygen during the relevant period. Referring to the letters written by HCL to BOL, the arbitrator observed that HCL continued to accept oxygen gas supplied by BOL without avoiding the contract on the ground that there was breach of agreement by BOL. The arbitrator observed that there was neither excess consumption of furnace oil nor drop in production by HCL. Referring to the decisions of this Court in Associated Hotels of India Ltd. v. S.B. Sardar Ranjit Singh and Brijendra Nath Bhargava v. Harsh Wardhan, the arbitrator held that even if it was the case of HCL that there was non-compliance with certain terms and conditions by BOL, there was waiver and abandonment of the 15 rights conferred on HCL and it was not open to HCL to refuse to make payment to BOL on that ground. In view of waiver on the part of HCL, it was incumbent on HCL to make payment and since no such payment was made, BOL was right in making grievance regarding non-payment of the amount and accordingly an award was made in favour of BOL. The learned Single Judge as well as the Division Bench of the High Court considered the grievance of HCL so far as the claim of BOL allowed by the arbitrator was concerned and upheld it.
22. In view of the finding recorded by the arbitrator and non-interference by the High Court, we are of the view that no case has been made out by HCL as regards the claim allowed by the arbitrator in favour of BOL to the extent of supply of oxygen gas to HCL. Hence, the appeal filed by HCL deserves to be dismissed."
In the case in hand also the defendant has initially extended the time for completion of work by 15th January, 2021 but thereafter the plaintiff has requested for extension of time but the defendant has neither extended the time nor has rejected the request of the plaintiff but allowed the plaintiff to complete the work. On completion of the work, the Northern Central Railway issued Completion Certificate which is also not in dispute. On receipt of the bill, the defendant has paid TDS but failed to pay the bill amount to the plaintiff. The act of the defendant proves that the defendant has extended the time period for completion of work and there is no dispute with regard to the bill submitted by the plaintiff.
35. Considering the above, this Court finds that the plaintiff has proved the case and is entitled to get an amount of Rs. 29,69,527/-. The 16 transaction between the plaintiff and the defendant is commercial in nature and thus the plaintiff is also entitled to get interest at the rate of 10% per annum on the principal amount of Rs. 29,69,527/- from 12th October, 2021, till the realisation of the total amount. The plaintiff is also entitled to get cost of Rs. 75,000/- as the defendant instead of settling the matter compelled the plaintiff to approach this Court for recovery of its legitimate claim.
36. The defendant is directed to pay and amount of Rs. 29,69,527/- along with interest at the rate of 10% per annum from 12th October, 2021, till the realization of the total amount. The defendant is also directed to pay an amount of Rs. 75,000/- being the cost.
37. C.S. (Com) No. 759 of 2024 is disposed of. Decree be drawn accordingly.
(Krishna Rao, J.)