Delhi High Court
Universal Contractors & Engineers (P) ... vs The National Projects Constructions ... on 28 November, 2019
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
28th November, 2019
% Date of decision: 30th September, 2019
+ CS(COMM) No.1000/2018
UNIVERSAL CONTRACTORS &
ENGINEERS (P) LTD. .... Plaintiff
Through: Mr. Raghav Mehdirath, Adv.
Versus
THE NATIONAL PROJECTS
CONSTRUCTIONS CORPORATION LTD. ......Defendant
Through: Mr. Rajat Arora & Vishalakshi
Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This suit for recovery of Rs.4,91,99,187.71 paise, post
completion of pleadings, is ripe for framing of issues. The counsel for
the defendant however contends that the suit claim, on the basis of
averments in the plaint and documents filed by the defendant and
admitted by the plaintiff, is barred by time.
2. The counsels have been heard on the said aspect.
3. The plaintiff has instituted this suit, pleading that (i) the
defendant, on 27th December, 2011 floated a tender inviting bids for
execution of the work of "Construction of Permanent Building -
Package-1: Academic Block (Institute of Tribal Science & Arts) for
Indira Gandhi National Tribal University (IGNTU) at Amarkantak";
(ii) the plaintiff offered technical as well as price bid for the aforesaid
works, and the plaintiff was awarded the execution of the said works
vide Agreement dated 28th May, 2012; (iii) in terms of the Agreement,
the work had to be executed by the plaintiff within the period of 15
CS(COMM) No.1000/2018 Page 1 of 25
months commencing from 8th April, 2012; however the contract
envisaged and contained provisions and procedure for extension of
time in case the work was not completed within the stipulated time
framework; (iv) since the work was prolonged for no fault attributable
to the plaintiff, the time for execution of the work was extended upto
31st May, 2015 and the work executed by the plaintiff accepted
without levy of compensation under the contract; (v) in terms of the
Agreement, the defendant had undertaken to liquidate the bills
generated by the plaintiff in respect of the quantities every month,
after verification; (vi) after execution of contract, the defendant
"unilaterally opted to make variation in item 10.2, which had
invariable increased the cost component of the plaintiff to
accommodate the aforesaid variation in the specification of the said
item, for which various formal and informal interactions were made
by the functionaries of the plaintiff with the key functionaries of the
defendant, however, finding no conducive and positive response from
the defendant, the plaintiff was constrained to assert the aforesaid
claim in writing displaying its financial constraints in execution of the
aforesaid item with variation, as proposed by the defendant post
execution of contract"; (vii) the plaintiff, vide its letter dated 15th
April, 2013 explained justification for its claim for variation / extra
execution of work and on which financial implications to the tune of
Rs.7.90 crores were valued by the functionaries of the defendant and
forwarded to the High Power Technical Committee of IGNTU, which
was the principal employer / beneficiary of the work, to seek its
concurrence for the said expenditure; (viii) however till final
CS(COMM) No.1000/2018 Page 2 of 25
execution of the work and its acceptance to the satisfaction of the
defendant, the defendant failed in taking a final decision on the
aforesaid claim of the plaintiff; (ix) the plaintiff mobilized all its
resources to site and had been making endeavours to achieve
completion of work within stipulated time frame but owing to poor
coordination and lack of proper planning at the end of the defendant,
the work was inordinately delayed and completion was finally
recorded on 31st May, 2015; (x) the notice inviting tender required the
bidders to acquaint themselves with the site condition before offering
the bid; during the said site inspection the plaintiff noticed that works
earlier carried out on the site comprised of an "I" section that was
partially bolted and welded; the plaintiff thus quoted rates for
executing the said item in the manner being executed at site; the
drawings furnished with the bid document also showed the execution
of the said item as "I" Section; however after allocation of the work
vide contract aforesaid, the defendant unilaterally altered the design
specifications and directed the plaintiff to execute the same from "I"
to "Box" Sections; (xi) the same had adverse implications on the
pocket of the plaintiff; (xii) any variation in design, drawing or Bill of
Quantities was payable in terms as envisaged in the agreement
executed between the parties; (xiii) in addition to the said variation,
the construction drawings furnished to the plaintiff were totally
different from the tender drawings and caused variation in sundry
items; (xiv) to achieve completion of the work, the plaintiff had to
incur additional costs and of which the defendant was apprised; (xv)
the various variations which occurred on account of revision in the
CS(COMM) No.1000/2018 Page 3 of 25
items, in addition to what was required in terms of original Bill of
Quantities, were as under:
"A. Engaging and deploying T&P for Heavy "Box" Section.
B. To execute more welding for "Box" Section.
C. To execute more cutting is required for "Box" section.
D. To engage more Manpower required for "Box" section.
E. Additional time consumed in fabrication and erection of
"Box" section instead of "I" section.
F. Testing time taken for "Box" section is more when compared
to normal "I" sections.
G. Extra Primer works are required in "Box" section as we have
to apply primer both an outer and inner surface where as in
"I" section primer is applied only on outer surface. This has
caused an increase in duration of primer coating activity.
H. Extra Stiffeners in inners ide of "Box" section is required as
per drawing which has caused increase in wielding activity
that has increased fabrication time of "Box" section when
compared to normal "I" section.
I. In earlier ongoing project the connection details had been
executed using simple bolting system where as in our scope
of work in our project, the connection details were changed
as both Bolting and Welding.";
(xvi) on persuasion of the plaintiff, the defendant agreed and approved
the claim of the plaintiff; (xvii) however since the said work was being
got executed by the defendant as deposit work of IGNTU, the
defendant recommended revision with financial implications to the
tune of Rs.7.90 crores on account of variations and suggested to the
Registrar, IGNTU to refer it to High Power Technical Committee;
(xviii) though the plaintiff was not under any obligations to receive
CS(COMM) No.1000/2018 Page 4 of 25
acceptance from IGNTU, as the work was awarded by the defendant
to the plaintiff, but on request of the defendant, the plaintiff agreed to
wait for decision of High Power Technical Committee of IGNTU;
(xix) the bill for the work executed by the plaintiff was finalized and
paid on 31st July, 2016; however the decision as to the proposed
revisions as recommended by the defendant was kept in abeyance.
Though the defendant vide its letter dated 3rd September, 2015 to the
Registrar, IGNTU had recommended the matter to be placed before
the High Power Technical Committee, but the defendant did not take
any follow up action; and, (xx) the plaintiff was entitled for the
payment on variation in the quantities of the aforesaid items in terms
of rates analyzed by the plaintiff and the plaintiff is entitled to assert
the claim for the aforesaid amount along with interest at 11.5% per
annum, which comes out to Rs.4,91,99,187.71 paise, the details of
which are furnished in Schedule A to the plaint. Though the plaint as
aforesaid refers to Schedule A to the plaint, but no Schedule A is
found, neither in Part-I file nor in Part-II file nor any reference thereto
is found neither in the main index to the suit nor in Part-IIIA file.
Thus, it is not known, out of the suit claim of Rs.4,91,99,187.71 paise,
how much is towards the principal amount and how much is towards
the interest thereon at 11.5% per annum and from which date.
4. Notice may also be taken of the title given by the plaintiff to the
suit, which reads as under:
"SUIT FOR RECOVERY OF RS.4,91,99,187.71/- (RUPEES FOUR
CRORES NINETY ONE LAKHS NINETY NINE THOUSAND AND
ONE HUNDRED EIGHTY SEVEN ONLY) ARISING FROM
CS(COMM) No.1000/2018 Page 5 of 25
CLAIMS FOR LOSS SUFFERED ON ACCOUNT OF BREACH OF
CONTRACT EXECUTED BETWEEN THE PARTIES IN RESPECT
OF WORK FOR CONSTRUCTION OF PERMANENT BUILDING
FOR INDRA GANDHI NATIONAL TRIBAL UNIVERSITY AT
AMARKANTAK. PACKAGE 1; ACADEMIC BLOCK. (INSTITUTE
OF TRIBAL SCIENCES AND ARTS) AWARDED VIDE
CONTRACT AGREEMENT NO.799470/IGNTU-MP/PKG.-1/248
DATED 28.05.2012"
The aforesaid title is inconsistent with the claim in the suit as narrated
above. While from reading of the plaint, the claim is found to be for
works in excess of the contracted works, carried out by the plaintiff at
the asking of the defendant, but as per the title, the suit is for recovery
of compensation for breach of contract. There is no plea of any breach
in the body of the plaint.
5. The suit, filed without any application for interim relief, came
up before the Joint Registrar first on 10th July, 2018 and without
noticing the aforesaid incongruities / inconsistencies in the plaint, the
suit was entertained and notice thereof ordered to be issued and
pleadings completed as aforesaid.
6. The defendant has contested the suit pleading, that (i) the
plaintiff is guilty of suppression of true and correct facts; the plaintiff
has concealed that the plaintiff, vide its letters dated 30th September,
2015 and 5th October, 2015, while requesting the defendant to issue
Completion Certificate, clearly mentioned that there was no dispute as
on that date; (ii) in pursuance to the aforesaid letters, Completion
Certificate dated 4th May, 2016 was issued to the plaintiff by the
defendant; it is evident from the Competition Certificate that there was
CS(COMM) No.1000/2018 Page 6 of 25
no dispute as the plaintiff itself had requested for Completion
Certificate and admitted that there was no dispute of any regard; (iii)
the entire payment has been made by the defendant to the plaintiff and
the defendant has also returned the bank guarantee and security
deposit to the plaintiff after the completion of the work order; (iv) vide
letter dated 28th July, 2016, the plaintiff submitted its final running
account bill for the work, amounting to Rs.1,13,32,628/-, which was
verified by the defendant and the whole payment made to the plaintiff;
the plaintiff signed the payment sheet which again clearly shows that
the plaintiff had no dispute / claim with regard to the payments; (v) the
plaintiff has filed the present suit after almost two years of receiving
full and final payment, and concealing the true facts; (vi) the plaintiff
is an experience contractor and not new to construction contracts and
knew that the drawings in the tender documents were only reference
drawings and not good for construction drawings, which are issued at
the time of commencement of the work; (vii) the payment for works or
supplies is made on work or supplies actually measured; the final bill
raised by the plaintiff included the bill for extra items which has been
paid to the plaintiff; and, (viii) in spite of delay in completion of work
by the plaintiff, no damages or penalty was imposed by the defendant
and instead extension was granted by the defendant for smooth
construction of the building. Else, the defendant has specifically
denied each and every averment in the plaint including the averment
of the defendant, vide its letter dated 3rd September, 2015 having
assessed the financial implication at Rs.7.90 crores or having written
CS(COMM) No.1000/2018 Page 7 of 25
to the Registrar of IGNTU to refer the claim to the High Power
Technical Committee.
7. The plaintiff in its replication to the written statement of the
defendant though has not disputed having written letters dated 30th
September, 2015 and 5th October, 2015 but has denied that the
plaintiff in the said letters clearly admitted that there was no dispute.
Similarly, the plaintiff has not disputed that it raised a final bill of
Rs.1,13,32,628/- on the defendant and received payment thereof, but
has pleaded that it was only qua the work done, which did not include
the claim in respect of additional costs borne by the plaintiff
consequent to the variation in terms of Item No.10.2 of the Bill of
Quantities.
8. The counsel for the defendant has argued, that (a) the plaintiff
in the plaint has admitted the date of completion of the works
undertaken by the plaintiff in pursuance to the agreement with the
defendant as 31st May, 2015; (b) that the present suit has been filed in
July, 2018 i.e. after more than three years of the completion of the
work; (c) the defendant, at page 4 of its documents in Part-III(B) file,
has produced a copy of the letter dated 30th September, 2015 of the
plaintiff to the defendant as under:
"Date: 30.09.2015
To,
The Project Manager,
NPCC Ltd.
IGNTU Project, Amarkantak M.P.
Sub:- Construction of Academic building (Tribal Arts & Science) at
IGNTU, Amarkantak
CS(COMM) No.1000/2018 Page 8 of 25
Regarding issue of completion certificate
Ref. No.: Work Order No.799470/IGNTU-MP/PKG.-I/248 Dated
28.05.2012
Dear Sir,
It is requested to you, please issue completion certificate for
Academic Building (Tribal Arts & Science) for participating tender, as per
enclosed Performa. We have no any dispute as on date.
Thanking you
Your faithfully
Sd/-
For, M/s Universal Contractor and Engineers (P) Ltd.";
(d) the plaintiff, during admission / denial of documents, has admitted
the said document and Ex.D-1 has been put thereon; (e) the defendant
at page 5 of its documents in Part-III(B) file, has also produced the
letter dated 5th October, 2015 sent by the plaintiff to the defendant as
under:
"Date: 05.10.2015
To,
The Project Manager,
NPCC Ltd.
IGNTU Project, Amarkantak M.P.
Sub:- Construction of Academic building (Tribal Arts & Science) at
IGNTU, Amarkantak
Regarding issue of completion certificate
Ref. No.: Work Order No.799470/IGNTU-MP/PKG.-I/248 Dated
28.05.2012
Dear Sir,
CS(COMM) No.1000/2018 Page 9 of 25
It is requested to you, please issue completion certificate for
Academic Building (Tribal Arts & Science) for participating tender, as per
enclosed Performa. No any dispute as on date.
Thanking you
Your faithfully
Sd/-
For, M/s Universal Contractor and Engineers (P) Ltd.";
(f) the said document also has been admitted by the plaintiff in
admission / denial of documents and Ex.D-2 has been put thereon; (g)
the defendant, at page 6 of its documents in Part-III(B) file has
produced the letter dated 14th October, 2015 written by the plaintiff to
the defendant as under:
"Ref: UCE/NPCC-01/2015-IGNTU Date: 14th Oct, 2015
To
The Project Manager
NPCC Ltd.
IGNTU Site
Amarkantak M.P.
Sub: Construction of Academic building - Regarding release of security
deposit.
Work order No.799470/IGNTU-MP/PKG.-I/248 Dated 28-05-2012
Dear Sir,
With reference to the subject cited above, it is intimated that
Construction of Academic Building bas been completed in all respect and
entire building has been handed over to IGNTU authorities and being used
for the intended purpose since beginning of the academic session 2015 and
w.e.f. 1/6/2015.
It is submitted that as per the clause 11 Security Deposit of the
work order "after successful completion of work, 50% of the security
CS(COMM) No.1000/2018 Page 10 of 25
deposit can be released against bank guarantee from any nationalized bank
as per the approved format." The BG will be submitted at ZM office
directly after the vetting of the approved format.
We therefore request your good offices to release the 50% security
deposit against bank guarantee as we are facing financial crises.
Thanking you
Yours faithfully
Sd/-
(N.D. Sharma)
Director / Signatory
Universal Contractor and Engineers (P) Ltd.";
(h) the said document has also been admitted by the plaintiff in
admission / denial of documents and Ex.D-3 has been put thereon; (i)
the defendant, at page 7 of its documents in Part-III(B) file has
produced the letter dated 14th December, 2015 written by the plaintiff
to the defendant as under:
"Date - 14/12/2015
To
The Project Manager
NPCC Limited
IGNTU, Amarkantak
Anoopur (M.P.)
Sub:- Issue of experience certificate for construction of Academic block.
Sir,
With reference to above cited we need work experience certificate
for participating tender.
So, we request to you please issue work experience certificate.
Thanking you
Yours faithfully
Sd/- ";
CS(COMM) No.1000/2018 Page 11 of 25
(j) the said document has also been admitted by the plaintiff in
admission / denial of documents and Ex.D-4 has been put thereon; (k)
the defendant, at page 8 of its documents in Part-III(B) file has also
produced the letter dated 21st January, 2016 written by the plaintiff to
the defendant as under:
"Ref: UCE/NPCC-01/2016-IGNTU Date: 21st Jan, 2016
To
The Project Manager
NPCC Ltd.
IGNTU Site
Amarkantak M.P.
Sub:- Construction of Academic Building - Regarding release of security
deposit against Bank Guarantee.
Dear Sir,
With reference to the subject cited above, it is intimated that we
have submitted the bank guarantee at NPCC Raipur office on 7-01-2016 for
the release the 50% security deposit. The bank on the request of NPCC have
confirmed the issuance of BG vide their letter (copy enclosed) Annexure-
II(1).
We therefore request your good offices to issue the MB for early
release of security deposit.
Thanking you
Yours faithfully
Sd/-
(N.D. Sharma)
Director
Universal Contractor and Engineers (P) Ltd.";
(l) the said document has also been admitted by the plaintiff in
admission / denial of documents and Ex.D-5 has been put thereon; (m)
CS(COMM) No.1000/2018 Page 12 of 25
attention is next invited to page 21 of Part-III(B) file, being the final
bill dated 29th July, 2016 raised by the plaintiff on the defendant in the
sum of Rs.1,16,51,231/-; (n) though the plaintiff in the plaint has
claimed variation in the works, but not pleaded any particulars of how
the variation was effected and on which date; (o) Clause 3.01 and 3.2
of the General Conditions of Contract forming part of the agreement
between the parties, provides as under:
"3.0 SCOPE OF WORK
3.01 The scope of work covered in this tender shall be as per the Bill of
Quantities, specifications, drawings, instructions, orders issued to the
contractor from time to time during the work. The drawings for this work,
which may be referred for tendering, provide general idea only about the
work to be performed under the scope of this contract. These may not be
the final drawings and may not indicate the full range of the work under the
scope of this contract. Drawings released as "GOOD FOR
CONSTRUCTION" from time to time by the Engineer-in-charge of NPCC
and according be executed according to any additions / modifications /
alterations / deletions made from time to time, as required by any other
drawings that would be issued to the contractor progressively during
execution of work. It shall be the responsibility of the contractor to
incorporate the changes that may be in this scope of work, envisaged at the
time of tendering and as actually required to be executed.
3.2 The quantities of various items as entered in the "BILL OF
QUANTITIES" are indicative only and may vary depending upon the
actual requirement. The contractor shall be bound to carry out and
complete the stipulated work irrespective of the variation in individual
items specified in the bill of quantities.";
(p) thus, the plaintiff cannot claim any works to be extra on accounts
of the drawings appended to the tender document; (q) Clause 37.3 of
the aforesaid General Conditions of Contract also provides that the
CS(COMM) No.1000/2018 Page 13 of 25
plaintiff would become entitled to payment only after the defendant
has received the corresponding payment from the client / owner and
any delay in release of payment by the client / owner to the defendant,
leading to delay in release of corresponding payment by the defendant
to the plaintiff, shall not entitle the plaintiff to any compensation /
interest from the defendant; and, (r) the tender, in pursuance to which
agreement was signed by the parties, in Volume-II thereof under the
head "Schedule of Quantities - Civil Works", under the sub-head
"Steel Work", at Item No.7.05, provides "Structural steel work
riveted, bolted or welded in built up sections, trusses and framed
work, including cutting, hoisting, fixing in position and applying a
priming coat of approved steel primer all complete" and thus the
plaintiff is not entitled to claim any payment for extra work with
respect to "Box" Section.
9. Per contra, the counsel for the plaintiff has contended that, (i)
the claim of the plaintiff in the suit is for extra works and not with
respect to works done under the Agreement and of which payment has
been received; (ii) Clause 69 of the aforesaid General Conditions of
Contract between the parties titled Alteration in Specification, Design
and Drawing in Sub-clause 69.1 thereof, provides as under:
"69.1 The Engineer-in-Charge shall have power to make any
alterations in, omissions from, additions to or substitutions for, the
original specifications, drawings, designs and instructions that may
appear to him to be necessary during the progress of the work, and
the contractor shall carry out the work in accordance with any
instructions which may be given to him in writing signed by the
Engineer-in-Charge and such alternations, omissions, additions, or
CS(COMM) No.1000/2018 Page 14 of 25
substitutions shall not invalidate the contract and any altered,
additional or substituted work which the contractor may be directed
to do in the manner above specified as part of the work shall be
carried out by the contractor on the same conditions in all respects
on which he agreed to do the main work. The time for the
completion of the work shall be extended in the proportion that the
altered, additional or substituted work bears to the original contract
work, and the certificate of the Engineer-in-Charge shall be
conclusive as to such proportion. Over and above this, a further
period to the extent of 25 percent of such extension shall be allowed
to the contractor. The rates for such additional, altered or substituted
work under this clause shall be worked out in accordance with the
following provisions in their respective order:
i) The rates for the additional, altered or substituted work are
specified in the contract for the work, the contractor is bound to
carry out the additional, altered or substituted work at the same rates
as are specified in the contract for the work.
ii) If the rates for the additional, altered or substituted work are
not specifically provided in the contract for the work, the rates will
be derived from the rates for a nearest similar item of work as are
specified in the contract for the work. In case of composite tenders
where two or more schedule of quantities / bill of quantities form
part of the contract, the rates shall be derived from the nearest
similar item in the schedule of quantities / bill of quantities of the
particular part of work in which the deviation is involved failing that
from the lowest of the nearest similar item in other schedule of
quantity. The opinion of the Engineer-in-Charge as to whether or
not the rate can be reasonably so derived from the item in this
contract will be final and binding on the contractor.
CS(COMM) No.1000/2018 Page 15 of 25
iii) If the altered, additional or substituted work includes any
work for which no rate is specified in the contract for the work and
which cannot be derived in the manner specified in sub para (i) and
(ii) from the similar class of work in the contract then such work
shall be carried out at the rates entered in the Schedule of rates
(DSR-2007 including cost index considered in tender) plus the
percentage above or below to the quoted rates.
iv) If the rates for the altered, additional or substituted work
cannot be determined in the manner specified in sub-clauses (i) to
(iii) above, then the contractor shall, within 7 days of the date of
receipt of order to carry out the work, inform the Engineer-in-Charge
of the rate which it is his intention to charge for such class of work,
supported by analysis of the rate or rates claimed, and the Engineer-
in-Charge shall determine the rate or rates on the basis of prevailing
market rates of the material, Labour, T&P etc. plus 10% (Ten
percent) to cover the contractors supervision, overheads and profit
and pay the contractor accordingly. The opinion of the Engineer-in-
Charge as to the current market rates of materials and quantum of
labour involved per unit of measurements will be final and binding
on the contractor.
However, the Engineer-in-Charge, by notice in writing, will be at
liberty to cancel his order to carry out such class of work and arrange
to carry it out in such manner as he may consider advisable. But
under no circumstances, the contractor shall suspend the work on the
plea of non-settlement of rates of items falling under the clause.";
and, (iii) the plaintiff, at page 48 of its documents in Part-III(A) file,
has produced the copy of the letter dated 3rd September, 2015 written
by the defendant to the Registrar, IGNTU with reference to the MOU
CS(COMM) No.1000/2018 Page 16 of 25
dated 28th February, 2011 between IGNTU and the defendant, inter
alia stating as under:
"After the work was started the agencies have approached us stating
that there is variation in one of the item mentioned in the BOQ namely item
no.10.2 "Structural steel work riveted, bolted or welded in built up sections,
trusses and framed work, including cutting, hoisting, fixing in position and
applying a priming coat of approved steel primer all complete." and as per
the construction drawing received there was a change in scope of work. They
have also stated that there is a difference between tender drawing and good for
construction drawing regarding the item 10.2. They have asked us for the
revision of rates. Then we referred the case to University Architect vide mail
18th February 2013 asking for the clarification and he has stated that rate
revision is not required (copy of mail enclosed).
Accordingly, we have intimated the agencies that this cannot be
considered for rate revision, however, once again the agencies has approached
our corporate office asking for the rate revision item no.10.2, in this regard our
engineering section including our Corporate Office has opined that this case is
fit for rate revision since the executed item for structural work is different than
available item in contract agreement i.e. item no.10.2. Afterwards the agencies
were repeatedly asking us for revision of rates and threatened to stop the work
saying that they are incurring huge loss on this account for which we intimated
them to continue the work and assured that we will refer the matter to a high
power technical committee to look into the merits of the case.
The approximate financial implication if rates are revised is as follows.
1. Construction of Academic building (Tribal Art & Science): Rs.2.70 Crores.
2. Construction of Administrative building : Rs.2.50 Crores
3. Construction of Permanent hostel building Girls : Rs.2.70 Crores
Total : Rs.7.90 Crores
However, it is suggested that the matter may be referred to high power
technical committee so that they can give a decision regarding the claim of the
agency, whether structural steel item executed for the above buildings are
covered under DSR item No.10.2 or to be considered as an extra item.
CS(COMM) No.1000/2018 Page 17 of 25
Hence, we request you to do the needful at the earliest since we have to
finalize the contract."
10. I have considered the rival contentions.
11. I may at the outset state that the counsel for the defendant is not
correct in contending that the suit was filed in July, 2018. Though the
suit came up first before the Joint Registrar on 10th July, 2018 but the
suit is found to have been filed first on 30th May, 2018 and thereafter
re-filed on 2nd July, 2018 and 7th July, 2018. Thus the suit has been
filed on the last day of the third year from the date of completion of
the works i.e. 31st May, 2015.
12. Though the plaintiff in the title of the plaint has described the
suit as for recovery of compensation for breach of contract but from
the body of the plaint and the arguments, it is not in dispute that the
suit is for recovery of price of extra works claimed to have been done
by the plaintiff for the defendant in pursuance to the agreement dated
28th May, 2012 between the parties. The counsel for the plaintiff
contends the said extra works to have been got done under Clause 69
supra of the General Conditions of Contract executed between the
parties. However for the said clause to become applicable, the
plaintiff has to plead and show instructions in writing issued to the
plaintiff by the Engineer-in-Charge of the project, under his
signatures, to make alterations, additions or substitutions vis-a-vis the
original specifications, drawings, designs and instructions. Needless
to state, the plaintiff has not pleaded any such instructions, which as
per Clause 69.1 supra, are necessarily required to be in writing signed
by the Engineer-in-Charge. Had there been any such instructions in
CS(COMM) No.1000/2018 Page 18 of 25
writing, the plaintiff would not only have pleaded the same, but also
produced the same along with its plaint and which has not been done.
In fact, the plaint glosses over the requirement of such instructions to
be in writing, and the plaintiff has not pleaded any explanation for the
same being not in writing.
13. Clause 69.1 supra also provides for proportionate extension of
time for completion of such instructions for alternations, additions or
substitutions. The plaintiff, though has pleaded extension of time, but
has not pleaded the said extension to be proportionate to the additions,
alternations, substitutions required. Rather, it is plea of the plaintiff
that the extension was on account of delays of the defendant in
liquidating the running bills from time to time of the plaintiff and for
other reasons attributable to the defendant. Merely because the time
for completion was extended without levying any penalty on the
plaintiff, cannot necessarily raise an inference of the same being on
account of additions, alterations or substitutions required by the
defendant. Clause 69.1 also requires a certificate of the Engineer-in-
Charge as to the proportionate extension. No such certificate has been
pleaded or filed.
14. As per Clause 69.1(i) and (ii), the rates for additions,
alterations, substitutions if any were to be worked out at the same rate
as specified in the contract for the work, or if the additional, altered or
substituted work was not specifically provided in the contract, the
rates therefor were to be derived from the rates for nearest similar item
of work as specified in the contract for the works. Clause 69(iii) and
(iv) further provides that if the rates for the altered, additional or
CS(COMM) No.1000/2018 Page 19 of 25
substituted work cannot be derived in the manner specified in sub-
clause (i) and (ii), then the aforesaid rates has to be determined on the
basis of the Delhi Schedule of Rates, 2007 and if that is also not
possible, then the Engineer-in-Charge himself shall determine the
rates on the basis of prevailing market rates. The plaintiff, nowhere in
the plaint has pleaded under which provision of Clause 69.1 the cost
of the additional, altered or substituted work was computed. The only
inference is that neither any instructions for any additional, alteration
or substituted work was issued, nor did plaintiff have any occasion to
ask for in writing any confirmation thereof, or to have the rate thereof
determined from the Engineer-in-Charge as provided under Clause
69.1 (i) to (iv) aforesaid. It is significant that Clause 69.1 supra also
provides for the Engineer-in-Charge to, by writing, cancel the
additions, alterations or substitutions asked for, on non-settlement of
rates. It is thus evident that Clause 69 envisaged a settlement of rates
to be arrived at with respect to any additional, altered or substituted
work.
15. A reading of Clause 69 also shows that the costs of the
additional, altered or substituted work was required to be billed by the
plaintiff from time to time when such works were carried out. The
plaintiff does not claim to have raised any such bills. The only
explanation given therefor is that the defendant, vide its letter dated 3rd
September, 2015 to the Registrar of IGNTU has asked for the matter
to be referred to the High Power Technical Committee.
16. The plaintiff, in the plaint has portrayed as if the defendant in its
letter dated 3rd September, 2015 was satisfied with the additional work
CS(COMM) No.1000/2018 Page 20 of 25
and the value thereof claimed by the plaintiff. However, though the
plaintiff claims that the defendant had assessed the value thereof at
Rs.7.90 crores, but the plaintiff itself in the plaint is not claiming the
said amount and is claiming a sum of Rs.4,91,99,187.71 only and out
of which also, it is not known how much is the principal amount
claimed and how much is the pre-suit interest. There is no explanation
whatsoever in this regard.
17. Further, a reading of the letter dated 3rd September, 2015, made
out to be the fulcrum of the case of the plaintiff, does not show that the
defendant had approved of or was satisfied of the claim of the plaintiff
for additional work. Rather, in the letter dated 3 rd September, 2015,
the defendant has carefully acted as the messenger of the claim of the
plaintiff to IGNTU. A reading of the letter dated 3rd September, 2015,
material part whereof has been reproduced above, shows that the said
claim of the plaintiff was rejected by the University Architect as far
back as in the year 2013. The suit filed on 30 th May, 2018 is after
more than three years therefrom. Else, the defendant vide the said
letter merely suggested to the Registrar of the University to refer the
claim of the plaintiff to a High Powered Technical Committee.
18. It cannot be lost sight of that the plaintiff has instituted the suit
as a commercial suit, and under Order XIII-A of the CPC as
applicable to such suits, the Court is entitled to summarily dismiss the
suit if finds no real prospect of the plaintiff succeeding in the suit.
Such suits, which on the basis of pleadings and undisputed documents
are deadwood and which no amount of evidence can bring to life, are
not to necessarily go through the rigmarole of trial. Once the plaintiff
CS(COMM) No.1000/2018 Page 21 of 25
has made out a claim for additional/varied work carried out for the
defendant, the plaintiff, to be able to claim for such additional work
under the contract, is required to plead the case in terms of the contract
and if is not found to have done so, is liable to be non-suited
forthwith. Reference in this regard may also be made to B.S.N. Joshi
and Sons Ltd. Vs. Nair Coal Services Ltd. (2006) 11 SCC 548,
holding, in the context of tender contracts, that if there are essential
conditions, the same must be adhered to, and in the absence of a
power of general relaxation, principle of strict compliance will be
applied where it is possible for the parties to comply with the
conditions fully.
19. Be that as it may, the main thrust of the counsel for the
defendant, and with which an application under Order VII Rule 11 of
the CPC is also claimed to have been filed though not listed, is of the
plaintiff having unequivocally and repeatedly represented that it had
no disputes with the defendant, and having concealed the said fact.
20. Merit is found in the said contention also. Had any claims of the
plaintiff with respect to additional work done in pursuance to the
contract been pending consideration with the High Powered Technical
Committee, the plaintiff in its letters dated 30th September, 2015 and
5th October, 2015 reproduced above would not have stated that there
was no disputes as on that date. The plaintiff itself in the plaint claims
to have formally justified its claim for the additional work vide letter
dated 15th April, 2013. If the said claims were pending, there was
indeed a dispute on 30th September, 2015 and 5th October, 2015 when
the letters aforesaid were penned by the plaintiff. It is significant that
CS(COMM) No.1000/2018 Page 22 of 25
the plaintiff did not mention the said letters in the plaint, and even
after the defendant pleaded the same accusing the plaintiff of
suppression, it is not the plea of the plaintiff that the plaintiff was
forced or coerced into writing the said letters to have its admitted
dues, bank guarantee and security released from the defendant. In the
absence of any such plea of the plaintiff, there is no reason to not bind
the plaintiff to its unequivocal statement of having no dispute with the
defendant.
21. The plaintiff, after having approbated so, cannot be permitted to
reprobate and raise a dispute. The plaintiff, even if had any claim for
additional works against the defendant, was well within its right to
give up the said claim and in its letters aforesaid is found to have
given up the said claim.
22. Supreme Court, in National Insurance Co. Ltd Vs.
BogharaPolyfab Pvt. Ltd. (2009) 1 SCC 267, has held that when a
contract has been fully performed, there is a discharge of the contract
by performance, and the contract comes to an end; in regard to such a
discharged contract, no right to seek performance nor any obligation
to perform, remains; in short, there cannot be any dispute. It was
further held that when both parties to a contract confirm in writing that
the contract has been fully and finally discharged by performance of
all obligations and that there are no outstanding claim or disputes,
courts will not refer any subsequent claim or dispute to arbitration;
similarly, where one of the parties confirms that he has received the
payment in full and final satisfaction of all claims, and he has no
outstanding claim, that amounts to discharge of the contract by
CS(COMM) No.1000/2018 Page 23 of 25
acceptance of performance and the party confirming such discharge
cannot thereafter make any fresh claim or revive any settled claim. In
Union of India Vs. Master Construction Co. (2011) 12 SCC 349, the
Supreme Court, after taking note of the dicta in National Insurance
Co. Ltd.supra, added that where a party claims that a discharge
voucher or no-claim certificate has been obtained by fraud, coercion,
duress or undue influence, then the Court may look into such claim to
see whether the dispute is bona fide or genuine. However, it was also
held that such plea of fraud, coercion, duress or undue influence
cannot be merely a bald plea, and if such plea is found to be an after-
thought, make believe or lacking in credibility, then the Court must
lay the matter to rest there and then. In ONGC Mangalore
Petrochemicals Ltd. Vs. ANS Constructions Ltd. (2018) 3 SCC 373,
where also in the facts of the case the contractee had requested a
Completion Certificate and which was issued by the Contractor, the
Supreme Court held that the contractee cannot take a plea of coercion
and duress and claim for losses incurred during execution of contract
at a belated stage, after accepting the final payment in full and final
satisfaction of all its claims. The Court further held that there is no
point raising the claim for losses incurred during the execution of the
contract at a belated stage, which creates an iota of doubt as to why
such claim was not settled at the time of submitting final bills.
23. In the present case, as aforesaid, the plaintiff has at no point
pleaded that the letters dated 30th September, 2015 or 5th October,
2015, asking the defendant to issue a Completion Certificate and
claiming that there is no dispute as on that date, were sent under fraud,
CS(COMM) No.1000/2018 Page 24 of 25
coercion, duress or undue influence. In fact, vide letters dated 14 th
October, 2015 and 21st January, 2016, the plaintiff asked the defendant
to release 50% of the security deposit of the work order, and which as
per Clause 10 of the General Conditions of Contract between the
parties could be released only after completion of work. Vide letter
dated 28th April, 2016 also, the plaintiff asked the defendant for refund
of its performance guarantee as the work had been "completed
satisfactorily and handed over to the concerned authority".
24. In light of the aforesaid also, the plaintiff now, after three years
of the work being completed, and almost two years after the
Completion Certificate was provided by the defendant and the final
bill was drawn up and paid, cannot claim that there were unpaid dues
of the defendant.
25. Merit is thus found in the contention of the counsel for the
defendant that there is no need to frame issues and put the suit to trial,
when the plaintiff on the basis of pleadings and admitted documents is
not found to have any real prospect of success in the suit.
26. The suit is thus dismissed with costs to the defendant;
professional fee is assessed at Rs.1.50 lacs.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
NOVEMBER 28, 2019 SEPTEMBER 30, 2019 „gsr‟..
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