Delhi District Court
M/S Thomas And Co. Pvt Ltd vs M/S Neel Auto Private Limited on 9 December, 2023
IN THE COURT OF Ms. NEELAM SINGH
DISTRICT JUDGE (COMM-02),
SOUTH-EAST DISTRICT, SAKET COURT, NEW DELHI
CS (COMM) 1430/2018
M/s Thomas & Co. Pvt. Ltd.
Through its Managing Director
Mr. Thomas Mathew
Office at:
D-143, Ambedkar Colony, Andheriya Mode
Chhatarpur, New Delhi-110030 ..... Plaintiff
Vs.
M/s Neel Auto Private Ltd.
Through its Managing Director
Regd. Office at:- 601, Hemkunt Chambers,
Nehru Place, New Delhi.
Factory at: Behram Pur Industrial Area
Begum Pur Khaidla Road
Khandsa, Gurugram,
Haryana-122001 ..... Defendant
Date of Institution: 24.09.2018
Arguments concluded on : 25.11.2023
Date of Judgment: 09.12.2023
Judgment
1.By this judgment, I shall decide the present suit filed by M/s Thomas & Co. Pvt. Ltd. (hereinafter referred as plaintiff) seeking relief of recovery of Rs. 8,16,966/- (Rupees Eight Lakhs Sixteen Thousand Nine Hundred and Sixty Six only) alongwith pendente lite and future interest on M/s Neel Auto Private Limited (Defendant).
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 1 of 22The crux of facts stated in brief is noted below:
Case of the plaintiff
2. The case of the plaintiff is that defendant has placed purchase order on 23.03.2015 for construction of civil work at the factory of the defendant which is situated at Behram Pur Industrial Area, Begum Pur, Khaidla Road, Khandsa, Gurugram, Haryana-122001. It was agreed between the parties that a retention money to the tune of Rs. 14,99,022/- was deducted which was to be released on completion of the work in question. Completion certificate was issued by the architect namely Aashrey Design Consultants (P) Ltd. on 21.06.2016 alongwith final bill certificate. In the certificate of payment for final bill dated 21.06.2016, the architect (Aashrey Design Consultants (P) Ltd.) had deducted a final sum of Rs. 2,49,000/- for quality issue and other aspects. This sum of Rs. 2,49,000/- in addition to the sum of Rs. 85,535/- which was further deducted on settlement of final bill of 13.10.2016. The defect liability period started on 21.06.2016 and culminated on 21.06.2017. After completion of the project and after issuance of completion certificate, 50 per cent of the retention money was released to the plaintiff and 50 per cent of the retention amount which was Rs. 14,99,022/- (i.e. Rs. 7,49,511/-) was to be released after completion of defect liability period which completed on 21.06.2017. It is averred by the plaintiff that on 13.10.2017, one MOM (Minutes of Meeting) between the plaintiff and the defendant was prepared after submission of final bill wherein it is clearly mentioned that a CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 2 of 22 sum of Rs. 85,535/- was towards all defects raised by the defendant and on 13.10.2016, final bill was completely settled and it was decided between both the parties that MOM would be treated as no dues certificate. Plaintiff has demanded for this amount of Rs. 7,49,511/- from the defendant orally, telephonically and by e-mails on several occasions but defendant did not release the said retention money. Plaintiff has sent a legal notice for release of retention money on 05.12.2017 but despite of the notice, the defendant failed to release the retention money and hence the present suit was filed for recovery of an amount of Rs. 8,16,966/- as the plaintiff has included the interest amount at the rate of 9 per cent per annum from the date of retaining the retention money till filing of the suit.
Case of the defendant 3.1 Written Statement has been filed on behalf of the defendant wherein the Defendant submitted that there is no cause of action in favour of the plaintiff and against the defendant. It is submitted that a tender CPO No. 1415 CPC AAP X 132 dated 23.03.2015 for civil construction was alloted to the plaintiff and plaintiff raised final bill but the defendant in good faith and in terms of the said tender document made the payment to the full and final satisfaction of the plaintiff. As per clause 7.18 and Appendix-A (11.0) of the tender document, which provided for retention of 5 per cent of tender amount for a further period of one year commencing from 21.06.2016 to 20.06.2017, so the defendant under the said contract legally and validly retained the CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 3 of 22 amount of Rs. 7,49,511/- which was payable after a period of one year and subject to successful completion of the civil work done by the plaintiff as per the the tender document.
3.2 It is further the case of the defendant that the work of the plaintiff was very low quality and defendant could not utilize the site properly which resulted into high financial losses to the defendant on day to day basis and its daily production and dispatch got severally affected. Defendant raised hue and cry and requested the plaintiff to rectify the quality issue immediately so as to prevent such financial losses which started accruing to the defendant because of poor quality of civil work carried out by the plaintiff. It is submitted that in this regard, various meetings took place including the MOM dated 06.08.2016 which was duly admitted and signed by the plaintiff and in which plaintiff duly accepted the poor performance and low quality of civil work carried out by the plaintiff. Plaintiff finally agreed to get the rectification done and fixed a date of 21.04.2017 to commence upon the rectification work at site and sent one team to carry out due inspection and accordingly one team came to the site and discussed the modalities with civil in-charge of the defendant. Thereafter, the said team left the site on the pretext to arrange for equipments and manpower to start the rectification work but the said team did not turn up and instead a new agency reached the site on 22.04.2017 with supervisor of plaintiff and informed that the civil work cannot be rectified. Defendant sent various e-mails to the plaintiff for rectification of the work. It is further the case of the defendant that defendant sent an e-mail dated 24.04.2017 CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 4 of 22 thereby informing the plaintiff that the rectification of poor quality of civil work would be awarded to another contractor and expenses incurred in getting the said rectification would be deducted to the account of plaintiff and accordingly, defendant had appointed another contractor Sorout Construction Company and the substandard and defective civil work so carried out by the plaintiff was rectified by the defendant. Defendant has paid Rs. 5,74,743/- to the new contractor for rectification and supplied allied material estimating to Rs. 75000/- and thus defendant has spent around Rs. 6,50,000/- for getting the defective work rectified.
Replication and Issues
4. Thereafter, plaintiff has filed replication and reiterated its stand. After completion of pleadings, issues came to be framed on 22.11.2019 as under:
1. Whether plaintiff has cause of action to file the present suit? OPP
2. Whether the full and final payment has been made by the defendant as claimed? OPD
3. Whether the work carried out by plaintiff was of low quality as alleged and if so, its effect? OPD CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 5 of 22
4. Whether plaintiff failed to rectify the alleged low quality work despite requests? OPD
5. Whether plaintiff is entitled for the suit claim, if so, to what extent? OPP
6. Whether the plaintiff is entitled for interest, if so, at what rate for which period and on what amount? OPP
7. Relief, if any.
Plaintiff's Evidence 5.1 The matter then was kept for evidence. PW-1 Sh. Will Thomas has tendered his evidence by way of affidavit Ex. PW1/X. He also relied upon following documents:
1). Resolution is Ex.PW1/1.
2). Purchase order dated 23.03.2015 is Mark-PW1/X.
3). Copy of completion certificate is Mark PW1/X1 (colly.).
4). Copy of final bill payment certificate dated 21.06.2016 is Mark PW1/X2 (colly.).
5). Copy of minutes of meeting dated 13.10.2016 is Mark-PW1/X3.
6). Copy of letter issued by the plaintiff and accepted by defendant is Mark PW1/X4.
7). Copy of statement of payment to be received by the plaintiff is Mark PW1/X5.
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 6 of 228). Letter dated 26.07.2017 and e-mails dated 26.07.2017 is Ex. PW1/2 (Colly.).
9). E-mail dated 13.05.2017 is Ex. PW1/3.
10). Extract of the contract document is Ex. PW1/4.
11). E-mail dated 03.08.2016 is Ex.PW1/5.
12). E-mail dated 04.08.2016 is Ex. PW1/6.
13). E-mail dated 22.09.2016 is Ex. PW1/7.
14). E-mail dated 25.09.2016 is Ex.PW1/8.
15). E-mail dated 26.09.2016 is Ex.PW1/9.
16). E-mail dated 29.09.2016 is Ex.PW1/10.
17). E-mail dated 01.03.2017 is Ex.PW1/11.
18). E-mail dated 03.03.2017 is Ex.PW1/12.
19). E-mail dated 11.05.2017 is Ex.PW1/13.
20). E-mail dated 13.05.2017 is Ex.PW1/14.
21). Another E-mail dated 13.05.2017 is Ex.PW1/15.
22). E-mail dated 30.10.2017 is Ex.PW1/16 (Colly.).
23). E-mail dated 06.11.2017 is Ex.PW1/17.
24). Another E-mail dated 06.11.2017 is Ex.PW1/18.
25). Legal notice dated 05.12.2017 is Ex. PW1/19.
26). Postal receipts are Ex. PW1/20.
27). Certificate u/s 65-B of Indian Evidence Act is Ex. PW1/21.
28). Another certificate u/s 65-B of Indian Evidence Act is Ex. PW1/22.
5.2 PW-1 was cross-examined at length by Ld. Counsel for defendant. During cross-examination by Ld. Counsel for defendant, he deposed that the defects liability period was for one CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 7 of 22 year commencing from 21.06.2016 to 20.06.2017. The meaning of defects liability period is that during this period in case any defects are observed in the works undertaken by the vendor then they would be responsible for undertaking remedial works for the same but this did not include works which would be entailed as damage caused during operation. He further deposed that they handed over the facility after completion on 21.06.2016, as per completion certificate issued by the Architect. He accepted the deduction of Rs. 2,49,000/- shown in the document at Mark-PW- 1/X2 then exhibited as Ex. PW-1/23 which includes a sum of Rs. 1,02,000/- on account of delay / quality issues. He deposed that he agreed that a sum of Rs. 85,535/- was also deducted on account of quality issues as shown in Mark-PW-1/X3 and then exhibited as Ex. PW-1/24. He further deposed that balance 50% of security deposit was to be released after the expiry of defect liability period. He denied the signature of the Plaintiff firm on the minutes of meeting dated 06.08.2016 marked as Mark-PW-1/X6. He further deposed that they visited the Defendants unit on 04.03.2017. He deposed that Para G Page 14 of the Affidavit in chief dated 27.02.2021 is a matter of record. The teams sent by him on 21.03.2017 and 22.03.2017 visited the site to review the highlighted issues by the Defendant. He accepted the email dated 03.08.2016 which is marked as Ex. PW-1/D1. He further deposed that he did not remember if he received any email dated 24.04.2017 which is marked as PW-1/X7. He had received the emails dated 09.05.2017, 11.05.2017 and 13.05.2017 which are exhibited as Ex. PW-1/D2, Ex. PW-1/D3 and Ex. PW-1/D4 respectively. He further deposed that they have not accepted the CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 8 of 22 issues highlighted as snags as they were damage caused during the use of the facility. Thereafter, plaintiff's evidence was closed vide separate statement of PW-1.
Defendant's Evidence 6.1 Matter was fixed for defendant's evidence. Defendant has examined Sh. Anuj Aggarwal as DW-1. DW-1 Sh. Anuj Aggarwal has tendered his evidence by way of affidavit Ex. DW1/A. He also relied upon following documents:
1. Copy of resolution dated 18.01.2019 is now Ex.DW1/1.
2. Copy of relevant pages of the Tender Document Ex.DW1/2 is de-exhibited and marked as Mark A.
3. Copy of email dated 03.08.2016 Ex.DW1/3 is de-exhibited and marked as Mark B.
4. Copy of MOM dated 06.08.2016 Ex.DW1/4 is de-exhibited and marked as Mark C.
5. Copy of email dated 24.04.2017 Ex.DW1/5 is de-exhibited and marked as Mark D.
6. Copy of the job order dated 02.06.2017 Ex.DW1/6 is de-exhibited and marked as Mark E and invoice dated 18.06.2017 is now Ex.DW1/7 (OSR).CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 9 of 22
6.2 During cross-examination by Ld. Counsel for plaintiff, DW- 1 deposed that he was never the employee of Neel Auto Pvt Ltd.
He further deposed that he was deposing because all these documents and work was carried out under his supervision as Project Manager. He was writing the emails to the defendant in the capacity of project manager. The debit note to the plaintiff had been sent by him. There is no such debit note on record. He was not having any copy of debit note which was sent to the plaintiff by him. He again said that document marked as Mark D is the copy of debit note. The purchase order dated 23.03.2015 marked as Mark X was sent by him in the financial department. The said document is Ex.PW1/D1. He has seen the copy of completion certificate dated 21.06.2016. Mr. I A Murthy, was the Architect of Assharay Design Consultant Pvt Ltd. who has prepared completion certificate (Ex.PW1/D2). He further deposed that Ex.PW1/23 was the final bill certificate issued by the defendant. The architect had debited the amount for quality related issues in final bill dated 21.06.2016. He was aware about document Ex.PW1/2 dated 26.07.2017. He further deposed that the deficiencies shown in the work were rectified by the plaintiff. He further deposed that the rectifications were not done as per the contract. Thereafter, defendant's evidence was closed vide separate statement of counsel for defendant.
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 10 of 22Final Arguments
7. The matter was listed for final arguments. Ld. Counsel for the plaintiff as well as Ld. Counsel for defendant made their respective submissions. Written submissions have also been filed on behalf of both the parties.
Arguments on Behalf of the Plaintiff:
8.1 It is submitted by Ld. Counsel for the plaintiff that plaintiff completed construction of Defendant's factory in accordance with the agreed-upon specifications. It is further argued that on completion of project, the project architects Ashrey Design Construction and Architect throughly inspected the construction work, it work and on being fully satisfied issued the completion certificate on 21.06.2016 (Ex. PW1/D2). It is further argued that even in cross-examination, DW-1 has proved Ex. PW1/D2 by stating:
"I have seen the copy of completion certificate dated 21.06.2016. Mr. I A Murthy, was the Architect of Assharay Design Consultant Pvt. Ltd. who has prepared the completion certificate. The same is now Ex. PW1/D2."
8.2 It is further argued that after the completion certificate which is Ex. PW1/D2, the project architect also issued a payment certificate dated 21.06.2016 which is Ex. PW1/23 in which the architect of defendant has wrongly imposed and adjusted penalty and other deductions but despite that plaintiff accepted the same considering it to be not a very big amount and also plaintiff did CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 11 of 22 not want to dissatisfy the defendant. It is argued that the document PW1/23 was confronted in cross-examination of PW-1 who stated that:
"I accept the deduction of Rs. 2,49,000/- shown in document at Mark PW1/X-2 now exhibited as PW1/23 which includes a sum of Rs. 1,02,000/- on account of delay/ quality issues. I further agree that a sum of Rs. 85,535/- was also deducted on account of quality issue as shown in Mark-PW1/X3 and now exhibited as Ex. PW1/24."
8.3 Even more this document Ex. PW1/23 was also confronted in cross-examination of DW-1 who stated that:
"It is correct that Ex. PW1/23 is the final bill certificate issued by the defendant. The architect has debited the amount for quality related issues in final bill dated 21.06.2016."
8.4 It is argued that in view of the statements in cross- examination by PW-1 as well as DW-1, defendant had no legal right to uphold the retention money. Furtthermore, DW-1 in his cross-examination has also admitted and stated that:
"It is correct that the deficiencies shown in the work were rectified by the plaintiff."
8.5 It is further submitted that plaintiff provided extensive documentation supporting its claims, including:
(a) Purchase order dated 23.03.2015 detailing the contract terms.
(b) Completion certificate dated 21.06.2016 confirming satisfactory project completion.CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 12 of 22
(c) Correspondence demonstrating timely rectification of reported issues.
(d) Defendant's own email acknowledging the overdue payment.
8.6 Defendant's Contentions (Refuted by Plaintiff): Defendant claims to have independently rectified alleged deficiencies at a cost of Rs. 6,50,000/- (Mark-E and Ex. DW-1/7). Ld. Counsel for Plaintiff disputes the validity and relevance of these documents, arguing that they lack specific details regarding the nature and scope of the alleged remedial work. No corresponding debit note was issued to the Plaintiff for the claimed expenditure. It is further argued that defendant's witness acknowledged that Plaintiff rectified all reported deficiencies during the project. In light of the above submissions, Ld. Counsel for plaintiff prayed to rule in favor of the Plaintiff's claim for retention money and accrued interest.
Counter-Arguments on Behalf of the Defendant:
9. It is argued by Ld. Counsel for defendant that Plaintiff's claim for retention money and interest is unfounded due to breaches of the construction contract. Significant deficiencies and poor quality construction necessitated remedial work. It is further argued that architect's documented deductions totaling Rs. 3,34,535/- for quality issues and delays. It is further argued that e- mail dated 11.05.2017 acknowledges unresolved substandard work. It is further argued that defendant reported defects as early as July 2016, within one month of completion certificate issuance.
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 13 of 22It is further argued that defendant consistently notified Plaintiff of outstanding defects throughout the 12-month period. It is further argued that defendant was compelled to hire M/s Sorout Construction Co. to rectify defects left unattended by Plaintiff and invoice and job order for Rs. 5,74,743/- demonstrate the financial burden of Plaintiff's negligence.
10. Both parties presented compelling arguments supported by evidence and countered each other's claims effectively. I now propose to deal with the issues in the background of the record. The court will meticulously analyze the presented evidence and consider the arguments of both parties before issuing a final verdict that is based on the principles of law and the specific facts of the case.
Issue-wise findings Issue No. 1: Cause of Action
11. Contractual Entitlement: The purchase order dated 23.03.2015 (Ex. PW1/D1) establishes a binding contract between the parties, explicitly mentioning the plaintiff's entitlement to the retention money upon project completion and fulfillment of contractual obligations.
12. Completion Certificate: The completion certificate issued by the appointed architect, Aashrey Design Consultants (P) Ltd., CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 14 of 22 on 21.06.2016, serves as prima-facie evidence of project completion as per contractual specifications.
13. Partial Release of Retention Money: The defendant's release of 50% of the retention money acknowledges the plaintiff's partial fulfillment of contractual obligations and further strengthens their claim for the remaining sum.
14. Breach of Contract: The defendant's withholding of the remaining 50% of the retention money without presenting demonstrably justified reasons for alleged poor workmanship constitutes a potential breach of contract, thereby granting the plaintiff legal standing to seek redressal through the court.
15. The court is aware of the deductions made in the final bill for quality issues and delays. However, these deductions don't negate the plaintiff's claim for the remaining retention money. The validity of these deductions and their potential impact on the final amount recoverable by the plaintiff will be addressed in the court's subsequent decisions on other issues.
16. The term Cause of Action refers to a set of facts or allegations that make up the grounds for filing a lawsuit. A Cause of Action is therefore by its very nature essential to a Civil Suit, since without a Cause of Action a Civil Suit cannot arise. The term Cause of Action is mentioned in the Civil Procedure Code, 1908 in various places. The first such instance is in Order I Rule 8 where in the explanation it is written that the parties being CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 15 of 22 represented in the suit need not have the same cause of action as the person they are being represented by. The fact that a cause of Action is essential to a suit is represented in Order II Rule 2 of the Code wherein it is stated that a plaint must mention the cause of action if it is to be instituted suit. Order VII Rule 1 reaffirms the same.
17. To pursue a cause of action, the plaintiff pleads or alleges facts in a plaint, the pleading that initiates a lawsuit. A cause of action is said to consist of two parts, legal theory (the legal wrong the plaintiff claims to have suffered) and the remedy (the relief a court is asked to grant). Sometimes cases arise where the facts or circumstances create Multiple Causes of Action. Plaintiff must prove the major legal points of the case lie in his favour; these are called the "elements" of that cause of action.
18. Therefore, based on the presented evidence and applicable legal principles, the court recognizes the plaintiff's valid cause of action to pursue their claim for the withheld retention money. Accordingly, issue no. 1 is decided in favour of the plaintiff.
Issue No. 2: Full and Final Payment - Analysis and Preliminary Findings
19. Final Bill Deductions: The final bill certificate dated 21.06.2016 indicates deductions for alleged quality issues and delays. These deductions, per se, suggest that complete financial settlement may not have been achieved.
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 16 of 2220. Minutes of Meeting as Agreement: The minutes of meeting dated 13.10.2016 constitute a binding agreement between the parties, stipulating settlement of all outstanding matters, including "a sum for all defects raised by the defendant." The plaintiff's actions in rectifying the defects as per the agreement demonstrate fulfillment of their contractual obligations regarding quality issues.
21. Unjustified Withholding: The defendant's continued withholding of the retention money and agreed-upon payments, despite the plaintiff's compliance with the agreement, is unjustified and constitutes a breach of contract.
22. Retention Money: The continued withholding of the retention money by the defendant presents a further factor casting doubt on the claim of full and final payment. The retention sum is typically released upon completion of contractual obligations and full financial settlement. Its ongoing withholding suggests potential outstanding financial claims.
23. Burden of Proof: Despite the initial deductions in the final bill, the burden of proving full and final payment falls on the defendant. Their inability to demonstrate sufficient justification for withholding the remaining sum weakens their claim.
24. Based on the current evidence, the court holds that the defendant cannot claim full and final payment while withholding CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 17 of 22 the retention money and agreed-upon payments despite the plaintiff rectifying the alleged defects. Therefore, the court finds in favor of the plaintiff on issue no. 2.
Issue 3 & 4: 3. Whether the work carried out by plaintiff was of low quality as alleged and if so, its effect? OPD
4. Whether plaintiff failed to rectify the alleged low quality work despite requests? OPD
25. Unsubstantiated Allegations: The defendant's reliance on internal documents and emails expressing concerns, while duly noted, fails to provide substantive proof sufficient to negate the architect's professional judgment and establish widespread substandard work. The court finds the mere presence of internal concerns insufficient to override the official completion certificate.
26. Binding Agreement: The minutes of meeting dated 13.10.2016 constitute a binding agreement outlining the existence of "defects raised by the defendant" and the plaintiff's obligation to address them.
27. Demonstrated Compliance: The court acknowledges the plaintiff's documented efforts to rectify the identified defects in a timely and adequate manner, consistent with the agreed-upon terms. Emails and other relevant documentation provided by the CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 18 of 22 plaintiff provide clear evidence of compliance with the rectification agreement.
27. Unproven Counter-Claims: The defendant's persistent claims of unsatisfactory rectification remain unsubstantiated and lack sufficient counter-evidence against the plaintiff's documented efforts and compliance. The court finds the defendant's allegations to be speculative and unsupported by concrete evidence.
28. The court further notes the weaknesses in the defendant's evidence, which contribute to a weaker case. Reliance on non- original documents like the tender document copy (Mark-A) and job order (Mark-E) raises concerns about their authenticity and evidentiary weight.
29. Missing Witness Testimony: The defendant's failure to present any witness testimony from the company allegedly performing the substandard rectification work further undermines their case and suggests a lack of credible evidence.
30. Therefore, based on the preponderance of evidence and the evident shortcomings in the defendant's case, the court finds in favor of the plaintiff on both Issue 3 and Issue 4. The plaintiff's documented fulfillment of contractual obligations regarding work quality and defect rectification remains unchallenged by the defendant's unsubstantiated claims and weak evidence.
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 19 of 22Issue 5: Whether plaintiff is entitled for the suit claim, if so, to what extent? OPP
31. Undisputed Contractual Obligation: Based on the findings in issue no. 1, the court recognizes the defendant's indisputable contractual obligation to fulfill the outstanding financial commitments to the plaintiff upon project completion and contractual fulfillment.
33. Demonstrated Breach: As per the findings in issue no. 2, the defendant's continued withholding of the retention money and agreed-upon payments, despite the plaintiff's demonstrated compliance with contractual obligations regarding work quality and defect rectification, constitutes a clear and unequivocal breach of contract.
34. Reasonable Mitigation Efforts: The court observes no evidence suggesting the plaintiff failed to take reasonable steps to mitigate their losses. They have diligently pursued legal remedies while continuing their operations, demonstrating responsible action to minimize the impact of the defendant's breach.
35. The well-established principle of awarding damages for financial losses arising from contractual breaches and non- payment finds support in numerous precedents given by Hon'ble Apex Court as well as our own Hon'ble Delhi High Court.
CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 20 of 2236. Therefore, based on the overwhelming evidence and applicable legal principles, the court finds in favor of the plaintiff on issue 5. The defendant is liable to pay Rs. 8,16,966/- for the damages incurred by the plaintiff as a direct result of their breach of contract and non-payment.
Issue no. 6: Whether the plaintiff is entitled for interest, if so, at what rate for which period and on what amount? OPP
37. As regards the rate of interest claimed by the Plaintiff at the rate of 24 per cent is concerned, I am of the considered opinion that as per the Judgment of Hon'ble Supreme Court in Central Bank of India Vs. Ravindra AIR 2001, Supreme Court 3095, the grant of pendente-lite and future interest is a subject matter of the discretion of the Court and not to be governed by the agreement between the parties. Accordingly in exercise of the discretionary power of this Court, I have granted pendente-lite and future interest at the rate of 6% p.a. to the Plaintiff because Section 34 of CPC, 1908 as well as the provisions of the Interest Act, 1978, contemplate grant of interest at the rate of 6% per annum and because in the past decade, the nationalized banks have also granted interest at the rate of 5-6% per annum, on terms deposits.
Relief
38. WHEREFORE,: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Defendant shall pay the Plaintiff the total sum of Rs. 8,16,966/- (Rupees Eight Lakhs CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 21 of 22 Sixteen Thousand Nine Hundred and Sixty Six only), together with interest accrued at the rate of 6 per cent per annum from the date of filing of suit until the date of actual realization.
39. The Suit of the Plaintiff is decreed accordingly. Decree sheet be drawn and file be consigned to Record Room.
Announced & dictated in the open Court on this 09th day of December, 2023 (NEELAM SINGH) District Judge (Commercial Court-02) South-East, Saket Courts, ND CS (COMM) 1430/18 M/s Thomas And Co. Pvt. Ltd. Vs. M/s Neel Auto Private Limited Page 22 of 22