Delhi District Court
Rajesh Kumar Gupta Proprietor Of M/S ... vs Municipal Corporation Of Delhithrough ... on 28 September, 2024
IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 1124/2023
CNR No. DLCT010102362023
DLCT010102362023
SH. RAJESH KUMAR GUPTA,
Proprietor of M/s Balaji & Associates),
D-11/51, Sector-8, Rohini,
Delhi-110085
Phone: 9311040159, 9310737272,
Email: [email protected]
......Plaintiff.
Vs
1. MUNICIPAL CORPORATION OF DELHI .
Through: its Commissioner,
4th Floor, Civic Centre, Minto Road,
New Delhi-110001
2. The Executive Engineer (M-II)KPZ,
Municipal Corporation of Delhi,
Shakti Nagar Extn.
Delhi-110052.
...... Defendants.
SUIT FOR RECOVERY OF RS.6,76,208/-
Date of institution of suit : 28.07.2023
Digitally
signed by
MUKESH
First Date before this court : 13.05.2024
MUKESH
KUMAR
KUMAR
GUPTA Date of hearing of final argument : 28.09.2024
Date of Judgment : 28.09.2024
Date:
GUPTA 2024.09.28
18:05:38
+0530
CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 1 of 28
Appearance(s) : Mr. Mohit Singhal, Adv. Ld. Counsel for plaintiff.
Shri Ashutosh Gupta and Shri Arman Monga, Advocates,
Ld. Counsel for the defendant.
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate upon plaintiff's suit for Recovery of Rs. 6,76,208/- alongwith interest @ 12% per annum pendentlite and future from 01.06.2023 till its realisation. The plaintiff has also prayed for costs of the suit against the defendant.
(B) PLAINTIFF'S CASE:-
2. Eschewing prolix reference to the pleadings crystallizing the same the plaintiff has averred in the plaint that:-
2.1) The plaintiff is the sole proprietor of M/s Balaji & Associates which is duly enrolled as a Municipal Contractor with the defendant corporation. The plaintiff firm is engaged in the civil nature of work for the defendant corporation.
2.2) The defendant No.1 is a body corporate of Delhi, established and governed under the Municipal Corporation of Delhi Act, 1957. The suit is being filed against the defendant through its Commissioner who is in-charge of all the acts and day to day activities of the defendant. The defendant No.1 is engaged in taking care of all the civil amenities, development etc . Defendant No.2, the Executive Engineer of defendant Digitally signed No.1 is responsible for construction activities in the area of erstwhile MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
2024.09.28 GUPTA 18:05:45 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 2 of 28 MCD and the work order in question was issued by him.
2.3) It is further the case of the plaintiff that plaintiff being Contractor approached the defendant for the work through tender invited by the Executive Engineer (M-II)/KPZ, and after due process became successful. After satisfaction and completion of required conditions at the stage of pre-work order, the works covered by the tender were awarded by the defendant No.2 on behalf of defendant No.1 to the plaintiff. Accordingly, the works order No. EE(M-II)/KPZ/SYS/2018-
19/479 dated 01.03.2019 ( in short "WO-479") was issued to the plaintiff. The plaintiff has also deposited the security/earnest money and entered into an agreement with the defendant as a pre-condition of the award. The work was completed by the plaintiff to the satisfaction of the defendant No.2 within the stipulated period to the satisfaction of Engineer-in-Charge, Defendant No.2.
2.4) The defendant No.2 completed the final measurement of the aforesaid works and bills pertaining to the aforesaid works were passed and recorded in the measurement books. The defendant No.2 passed the bill in respect of WO 479 for a sum of Rs.4,35,824/- as a net amount on 26.11.2019 on the basis of formalities completed and measurement book. The plaintiff has also deposed the security/earnest money of Rs.39,884/- and thus, the total amount including the amount of passed bills and security/earnest money comes to Rs.4,75,708/-.
2.5) Despite passing of the bill, the defendants have neither Digitally released the payment nor informed the plaintiff and amounts were signed by MUKESH MUKESH KUMAR KUMAR GUPTA withheld for which the plaintiff has made several request to the GUPTA Date:
2024.09.28 18:05:58 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 3 of 28 defendants for release of the amount of passed bill as also the security amount but to no avail. According to the clause 9 of the General Terms and conditions of the agreement, the defendants are liable to release the same within a period of six/nine months. The plaintiff considering the transaction being the nature of commercial transaction, has claimed interest of Rs.2,00,500/- @ 12% per annum as simple interest upon the principal amount of Rs.4,75,708/- from the date of passing of the bill i.e. from 26.11.2019 till 31.05.2023 for 1282 days which the plaintiff has not paid. The plaintiff has also claimed, an interest @ 12% per annum on the suit amount of Rs.6,76,208/-against the defendant with effect from 01.06.2023.
2.6) As per plaintiff, the defendants have tried to evade the payment on one pretext or the other compelling the plaintiff to issue a legal notice dated 02.03.2021 u/s 477/478 of the MCD Act, calling upon the defendants to pay the suit amount with interest @ 12% per annum which was also not replied to by the defendants.
2.7) The plaintiff has claimed the cause of action arose on the date when the defendants awarded the works order to the plaintiff on 01.03.2019, when raised the final bill in respect of WO No.479 dated
03.03.2022 and finally, on issuance of legal notice which was not responded to.
Digitally 2.8) Hence the present suit for recovery of Rs.6,76,208/- signed by MUKESH MUKESH KUMAR KUMAR GUPTA alongwith interests and costs.
GUPTA Date:
2024.09.28
18:06:05
+0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 4 of 28
(C) DEFENDANT'S CASE:-
3. On receipt of summons for settlement of issues, the defendants contested the suit by filing a detailed Written Statement thereby taking various preliminary objections as averred and mentioned herein under:-
3.1) The suit filed by the plaintiff is without any cause of action and therefore deserves to be rejected at the threshold. The plaintiff has failed to comply with the conditions of WO No.479 besides breaching the General conditions of Contract (GCC) . It has further been contended that the plaintiff has not submitted any bill either interim or final which he was contractually required to and as such in absence of any bill, no amount can be said to be due or payable to the plaintiff. It is further contended that the plaintiff has failed to disclose a cause of action to maintain the present suit and the plaintiff has failed to comply with and adhere to the contractual obligation as set out in the Work order and the General Conditions of Contract (GCC). The defendants have also reproduced clause 7, 9, 17 and 45 of the GCC to support its defence besides also raising the aspect of interest and limitation.
3.2) On merits, all the allegations made in the plaint have been denied as incorrect. It has been contended that the plaintiff himself admits being bound by the terms of the NIT, the Work Order and the MUKESH by Digitally signed MUKESH KUMAR GUPTA GCC, however, the plaintiff has failed to abide by the same and do what KUMAR Date:
GUPTA 2024.09.28 18:06:33 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 5 of 28 was necessary thereunder. The defendants have also denied that the plaintiff made necessary arrangements for execution and completion of the work within the stipulated time and that the work was completed by the plaintiff to the satisfaction of the defendants. It has also been contended that once the plaintiff is aware of his obligations under the GCC and the law, issuance of legal notice would not absolve him of his legal and contractual duty to furnish the bills. It has also been contended that the amounts given as security deposit cannot be refunded unless the plaintiff complies with provisions of the GCC. It has also been denied that defendants are liable to pay interest as claimed by the plaintiff as no amounts have become due on date. The entire claim of the plaintiff including the claim of the interest is stated to be false and liable to be dismissed.
(D) CRYSTALISING THE DISPUTE :-
4. On the pleadings of the parties and documents placed on record the following issues were framed for adjudication vide order dated 01.03.2024.
ISSUES.
(i) Whether the suit is liable to be dismissed for want of cause of action ? OPD.
(ii) Whether the plaintiff is entitled to recover the suit amount of Rs.6,76,208/- ?OPP
(iii) Whether the plaintiff is entitled to any interest from th defendant? if so, at what rate and for what period ?OPP Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
2024.09.28 GUPTA 18:06:40 +0530 (iv) Relief.
CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 6 of 28
(E) EVIDENCE OF PLAINTIFF.
5. Plaintiff, in support of his case, got examined himself as PW1 and reiterated the contents of the plaint on oath in his affidavit Ex.PW1/A. He got exhibited the Attested copy of Work Order 479 dated 01.03.2019 as Ex.PW1/1, Attested copy of passed bill dated 26.11.2019 as Ex.PW1/2 (colly), Copy of Legal Notice dated 02.03.2021 as Ex.PW1/3, Copy of Postal Receipts by which the legal notice was sent as Ex.PW1/4 (colly), copy of Non-Starter Report dated 11.02.2022 as Ex.PW1/5, Copy of pre-Institution Mediation Application as Ex.PW1/6, Attested copy of the Arrangement between the parties relating to the present work as Ex.PW1/7, Attested copy of Measurement Book relating to the work as Ex.PW1/8 and Attested copies of Demand of Funds raised by the plaintiff to the authority as Ex.PW1/9. He has deposed that despite the passing of the bills of the plaintiff, the defendant has failed to release the payments to the plaintiff and a legal notice in this regard also issued. It has further been deposed that the suit is correct and the defendant No.1 is liable to pay the outstanding amount alongwith interest and costs.
6. During cross-examination, Ld. Counsel for defendants has tried to puncture the testimony of PW1 on the point of compliance of terms & conditions of the Agreement, non-submitting the bill in question and other aspects including labour cleanrance. PW1 during cross-examination has denied the suggestion that he has not complied with the GCC Rules Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
2024.09.28 GUPTA 18:06:48 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 7 of 28 of the MCD Department. He has deposed that there is no completion certificate issued to him. He has voluntarily deposed that the bill has alredy been passed as it was issued after the completion of the work and the same also mentioned in the measurement book. He has further deposed that he has not obtained any labour clearance certificate from the labour department, however, he has voluntarily deposed that a certificate regarding no labour complaint received is mentioned in the measurement book. He has further deposed that he has submitted the bills to the department. He has admitted that he has not filed any bill with his plaint. However, he has voluntarily deposed that there is no receiving /acknowledgement given by the department for the submission of bills to them and the bills were submitted by him in April, 2019. He has denied the suggestion that the department has not liable to pay any interest as he has not submitted any final bill. He has also denied the suggestion that the department is not liable to pay any interest as he has not submitted any final bill or that he has deposed falsely.
7. No other witness was examined by the plaintiff and the evidence of the plaintiff was closed on 25.09.2024.
(F) DEFENDANT'S EVIDENCE :-
8. The defendant in its defence examined one Shri Kapil Kumar, Assistant Engineer (M-II), Keshav Puram Zone, MCD, as DW1 who has filed his evidence by way of affidavit Ex.DW1/A. He reiterated the contents of the Written Statement on oath. DW1 also deposed in his Digitally signed by MUKESH KUMAR MUKESH KUMAR GUPTA evidence that the plaintiff has not submitted any bill that he was GUPTA Date:
2024.09.28 18:06:55 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 8 of 28 contractually required to and that in the absence of any bill submitted by the plaintiff no amount can be said to be due or payable to the plaintiff. He has also deposed that the plaintiff has failed to comply with clause 17 and clause 45 of the GCC and unless the conditions of clause 17 and 45 are fulfilled, there can be no refund of security deposit to the plaintiff. He has deposed that the suit of the plaintiff is liable to be dismissed as misconceived and bereft of cause of action with exemplary costs.
9. The witness was subjected to cross-examination by Ld. Counsel for the plaintiff, during which DW1 has admitted that he has passed the bills of other contractor during his tenure in the similar form and manner as of Ex.PW1/2 i.e. the passed bills and as per his record, the passed bills is for a sum of Rs.4,35,824/-. He has further admitted that Ex.PW1/2 bears the signature of the contractor, however, he cannot identify the signature of the contractor. He has deposed that the bills prepared are on the basis of measurement book i.e. Ex.PW1/8(colly) and the measurement book Ex.PW1/8(colly) bears the signature of the contractor.
He has further deposed that as per record, there is no labour complaint received so far by the department. He has further deposed that the work has been completed as per the NIT (Notice Inviting Tender) condition and specification. He has further deposed that no security amount has been released to the plaintiff. He has denied the suggestion that the department is liable to pay interest as there has been delay in making the payment.
Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date: GUPTA 2024.09.28 18:07:16 +0530
10. No other witness was examined by the defendants and the CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 9 of 28 evidence of the defendants was closed vide statement dated 25.09.2024.
(G) ARGUMENTS ADDRESSED:-
ARGUMENTS OF PLAINTIFF.
11. Ld. counsel for the plaintiff Shri Mohit Singhal has vehemently argued that the plaintiff has successfully executed the awarded Work Order No.479 to the satisfaction of the defendants within time and as per the guidelines of the GCC. It has been argued that despite the aforesaid the defendant has failed to clear the outstanding amount which are legitimate dues of the plaintiff for reasons best known to the defendants. It has been stated that even after passing of the bill in respect of the work order, the defendants have not released the payment of the plaintiff leading to withholding a substantial amount and continued loss to the plaintiff. He has argued that after completion of the work the entire measurement with details have been duly entered in the Measurement Book and it was after completion of necessary documentation and formalities only the defendants have proceeded further to pass the bill as can be reflected from Ex.PW1/3 (colly) which not only bears the signature of the concerned Engineer but also the Accounts Officer and the Executive Engineer on behalf of the commissioner of the MCD. Ld. Counsel has argued that the defendants on one pretext or other, have been deferring the payment and not releasing the same. He has prayed that not only the suit be decreed with interest and costs but exemplary costs and damages should also be Digitally granted to the plaintiff against the defendants.
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2024.09.28
18:07:24
+0530
CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 10 of 28 ARGUMENTS OF DEFENDANT:
12. Ld. counsel for the defendant Shri Gupta on the other hand has vehemently opposed the arguments of the Ld. Counsel for the plaintiff and has stated that the plaintiff has not submitted the bills qua the Work Order No. 479 and therefore not complied with the terms and conditions of the GCC which he himself is relying upon and as such the suit of the plaintiff is pre-mature and misconceived. Ld. Counsel for defendants while making specific reference to clause 7 and 9 of GCC has vehemently argued that the submission of the bills is a pre-condition on which a cause of action can arise. On the aspect of refund of security deposit, Ld. Counsel has again referred to clause 17 and 45 of GCC to state that it was on account of plaintiff failure to complete the formalities, the same was not released as no occasion has arisen for the defendants to release the same. Ld. Counsel Shri Gupta has also referred to the Judgment of Hon'ble High Court in New Delhi Municipal Corporation & Ors. Vs. Sanjeev Kumar RFA No. 430/17 (DOD 22.03.2018). Finally, he has argued that the plaintiff has failed to comply with the provisions of MCD Act in as much as notice u/s 478 of the Act has issued to the defendant corporation was defective. He has further stated that the suit is liable to be dismissed with exemplary costs.
(H) ANALYSIS & DETERMINATION:-
13. I have heard the arguments addressed by the Ld. Counsels for the parties, perused the entire record including the oral and documentary by MUKESH MUKESH KUMAR evidence. I have given a thoughtful consideration to the same. My issue-
Digitally signedGUPTA KUMAR Date:
GUPTA 2024.09.28 18:07:33 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 11 of 28 wise determination is as under:-
Issue No.1: Whether the suit is liable to be dismissed for want of cause of action ?OPD .
14. The onus of proving this issue was held upon the defendants and the issue arises on the basis of preliminary objections raised by the defendants in his Written Statement that plaintiff has not submitted final bills and as such, the suit is liable to be dismissed. The DW1 in his deposition Ex.DW1/A has reiterated the aforesaid contention on oath to the effect that MCD had issued tender for certain works and Notice Inviting Tender (NIT) set outs the relevant terms and conditions and makes it clear that the General Conditions of contract and Special conditions of Contract shall be applicable. The plaintiff was awarded work by way of work order No. 479 dated 01.03.2019 in which an agreements and the General Conditions of Contract (GCC) was executed by which a contractor is required to submit and present bills (both interim and final) to the defendant for payment and the plaintiff has not submitted any bill which he was required to.
15. On the other hand, Ld. Counsel for the plaintiff has argued that when the bill Ex.PW1/2 has already been passed on the basis of Measurement Book Ex.PW1/8 then there is no question arisen to submit interim or final bill. Even in the cross-examination of DW1, the witness has deposed that as per record, the passed bills is for a sum of Rs.4,35,824/- which bears the signature of contractor and the bills prepared are on the basis of measurement book Ex.PW1/8. Now once Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date: the work is completed to the satisfaction of the defendants and the bill 2024.09.28 18:07:42 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 12 of 28 Ex.PW1/2 for a sum of Rs.4,35,824/- has been passed on the basis of measurement book Ex.PW1/8 and the measurement book and the bills both contains the signatures of the contractor (the plaintiff) herein and the officers of defendant MCD including the concerned Engineer in charge, it is not understandable as to how the same being withheld in the absence of any justified reason certainly the passed bill Ex.PW1/2 cannot be called a unilateral document and the plaintiff very well has a cause of action to maintain the suit on the basis of inaction of defendants without any justified reason for withholding the payment of passed bill.
16. Thus, in the absence of clear or cogent evidence, allegations made by the defendant in the written statement becomes nothing but bald assertions and the defendants have failed to discharge his onus conferred upon her in respect of the aforesaid issues even to the extent of preponderance of probabilities. This issue is accordingly decided against the defendants and in favour of the plaintiff.
Issue no.2. "Whether the plaintiff is entitled to recover the suit amount of Rs. 6,76,208/- from the defendant ?OPP"
17. The onus of proving this issue was held upon the plaintiff who has examined himself as PW1 and filed his affidavit by way of evidence as Ex.PW1/A. The defendants on its part has taken only one objection in its Written Statement that the suit is liable to be dismissed for the reason Digitally signed that the plaintiff has not complied with the terms and conditions of the MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.09.28 18:07:49 GCC which governs the tender and work order. This issue is pivotal to +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 13 of 28 the entire controversy between the parties as there is no dispute regarding the award of contract Ex.PW1/1, completion of work within stipulated time, labour complaint or any other issue regarding the satisfactory work being completed except the alleged non-compliance of GCC. Ld. Counsel for the defendants has vehemently taken only one stand in defence that the plaintiff has not submitted the bill, which he was contractually required to submit. It has also been argued that as per specific clause 7 and 9 of GCC and clause 4 of the work order Ex.PW1/1, the contractor shall not be entitled for any payment, if he does not submit the certificate of completion and further plaintiff was required to submit final bill within one month of the date of the final certificate of completion furnished by the Engineer-in-charge or within three months of physical completion of the work.
18. Per Contra, Ld. counsel for the plaintiff has argued that the defendants had passed the requisite bill in respect of the work done which have been exhibited as Ex.PW-1/2 a copy of which was also provided to the plaintiff which he had accepted after counter signing the same and hence, there was due compliance of the clause 7 and 9 of the GCC and as such, the plaintiff is entitled for the amount of the bill as claimed and which the defendants is withholding without any justifiable reason and even passing of the same after due measurement. He has relied upon the decisions of Hon'ble High Court of Delhi in North Delhi Municipal Corporation Vs. Barahi Construction RFA (COMM) 6/2021 (Neutral citation: 2021/DHC/958-D) and the judgment of Digitally signed by MUKESH MUKESH KUMAR Hon'ble Division Bench of High Court of Delhi in North Delhi KUMAR GUPTA GUPTA Date:
2024.09.28 18:07:58 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 14 of 28 Municipal Corporation Vs. Vipin Gupta RFA 160/2017 to support his point. He has further relied upon the judgment of Mr. Rajnish Yadav proprietor of M/s. Bharat Construction Company Vs. North Delhi Municipal Corporation, RFA (OS) (COMM) 1/2021 (Neutral citation:
2023/DHC/000174) to argue that once the defendants had accepted the execution of the work by the plaintiff as also after submission of the measurement duly entered in the Measurement Book even processed the bills pertaining to the work order without any dispute whatsoever and therefore, the defendants were under the liability to pay the contractual work amount to the plaintiff.
19. Before proceeding further, I deem it appropriate to reproduce the Clause 4,7 and 9 of the GCC which has been referred to by both the parties:-
Clause 4 of Work order:
"It should be noted - (a) that as and when orders are given for execution of any extra/substitute item prior orders from the competent Authority to be obtained before execution of the same to avoid any further complications; (b) that contractor has to submit his RA/Final bill with measurement otherwise nothing will be consider due on account of work execution".
Clause 7 GCC:
"No payment shall be made for work estimated to cost Rs. Twenty thousand or less till after the whole of the work shall have been completed and certificate of completion given. For works estimated to cost over Rs. Twenty thousand, the interim or running account bills Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.09.28 shall be submitted by the contractor for work executed on the basis of such recorded measurement on the 18:08:05 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 15 of 28 format of the department in the triplicate on or before the date of every month of the fixed for the same by the Engineer-in-Charge. The contractor shall not be entitled to be paid any such interim payment if the gross work done together with the note payment/adjustment of advances of material collected., if any, since the last such payment is less then the amount specified in Schedule 'F' in which case the interim bill shall be prepared on the appointed date of month after the requisite progress is achieved. Engineer-in Charge shall arrange to have the bill verified by taking or causing to be taken, where necessary, the requisite measurement of the work. In the even of the failure of the contractor to submit the bills progress is achieved. Engineer-in- charge shall prepare or cause to be prepared such bills in which event no claims whatsoever due to delays on payment including that of interest shall be payable to the contract. Payment on account of admissible shall be made by the Engineer-in-charge certifying the sum to which the contractor is considered entitled by way of interim payment at such rates as decided by the Engineer-in-charge of his Asstt. Engineer together with the account of the material as issued by the department, or dismantled materials, if any. The payment of passed bills will be subject to availability of funds in particular head of account from time to time in MCD. Payment of bills shall be made strictly on Queue basis i.e. first and past liabilities will be cleared and after that the release of payment for passed bills be in order of the demand received at HQ under particular head of accounts. No interest shall be payable to the contractor in case of delay in payment on account of non-availability of fund in the particular head of account of the MCD."
Section 9 of GCC "The final bill shall be submitted by the contractor in the same manner as specified in interim bills within three Digitally signed by months of physical completion of the work or within one MUKESH MUKESH KUMAR month of the date of the final certificate of completion KUMAR GUPTA GUPTA Date:
2024.09.28 furnished by the Engineer-in-charge whichever is earlier. 18:08:13 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 16 of 28 Nor further claims shall be made by the contractor after submission of the final bill and these shall be deemed to have been waived and extinguished. Payment of those items of the bill in respect of which there is no dispute and of items in dispute, for quantities and rates as approved by Engineer-in-charge, will, as far as possible be made after the period specified here-in-under the period being reckoned from the date of receipt of bill by the Engineer-in-charge or his authorized Asstt. Engineer, complete with account of material issued by the department and dismantled. The payment of passed bills will depend on availability of funds in particular head of account from time to time in MCD. Payment of bills shall be made strictly on Queue basis i.e. first the past liability will be cleared and after that the release of payment for passed bills will be in order of the demand received at the HQ and the particular head of account. No interest shall be payable to the contractor in case of delay in payment on account of non-availability of fund in the particular head of account of MCD.
(i) If the tendered value of work is upto Rs.5 lacs : 6 months.
(ii) If the tendered value of work exceeds Rs.5 lacs :9 months."
20. On harmonious constructions of these provisions, it is clear that :
"a. for payments of bills regarding the works, the Engineer-in-Chief is required to certify the payments. b. the payments of the passed bills shall be made subject to availability of the funds in specific head from time to time with the MCD.
c. the payments of the bills shall be strictly made on que basis, and d. the interest shall not be payable by MCD for delayed payment on account of non-availability of funds".
Digitally signed by MUKESH
21. Hon'ble High Court of Delhi had the occasion of examining the MUKESH KUMAR aforesaid clauses where it has been observed that a corporation which KUMAR GUPTA GUPTA Date:
2024.09.28 18:08:22 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 17 of 28 gets the work done to the satisfaction cannot be allowed to include a term in a contract which is per se unconscionable and unreasonable in so far as the availability of the funds are concerned as there is no fixed period or mechanism to determine as and when these funds shall be made available in a particular head of account that too without any knowledge of the aforesaid two factors to the plaintiff. Reliance placed on Sanjeev Kumar (supra). The Hon'ble High Court after examining the entire issue has even passed guidelines in the batch of appeals on 22.03.2018 where the bills after submission was required to be scrutinized by the Engineer in- chief and the work should be recorded in measurement book and bills should be passed. The Hon'ble High Court has been categoric that payment of 6 months and 9 months should be strictly adhered to and any delay in payment thereof would entail interest to be paid by the defendant corporation.
22. The Hon'ble High Court has gone to the extent of directing that for refund of security deposit and earnest money deposit the contractor shall unscrupulously comply with the condition of clause 17 and 45 for which even the payment of final bills need not be awaited. The Hon'ble High Court has further passed a plethora of directions for streamlining the aforesaid issue which results in avoidable litigation between the corporation and the contractors executing the work.
23. In the present case, it is not in dispute that the plaintiff firm was Digitally signed by MUKESH awarded WO No.479 dated 01.03.2019, Ex. PW1/1 by the defendant MUKESH KUMAR KUMAR No.2 and the said work were duly executed by the plaintiff and as a GUPTA GUPTA Date:
2024.09.28 18:08:31 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 18 of 28 precondition earnest money was also deposited by the plaintiff. It is also not in dispute that the work was completed within time and the plaintiff has completed the necessary formalities including the entering of work & measurement immediately in the measurement book Ex.PW1/8 on completion of the work leading to preparation of the bill Ex.PW1/2 passed the Executive Engineer concerned mentioning not only the details of the work done, rates on which the work was done and the actual amount due to be paid by the defendant corporation. The only question which has raised by the defendant is technical non-filing of final bill by the plaintiff.
24. According to the plaintiff, bill Ex.PW1/2 was passed on 26.11.2019 for Rs.4,35,824/- qua WO No.479, and the earnest amount for the same work of Rs. 39,884/- was also deposited as precondition and compliance of the tender document which has still not been returned by the defendants. The testimony of PW1 in this regard is not only clear and categoric but has also not been breached during cross-examination.
25. The defendant on the other hand, has taken only one technical objection that no bill was ever submitted for clearance to the defendant corporation and that Ex.PW1/8 was an internal noting of the defendant corporation. However, if the cross-examination of DW1 Shri Kapil Kumar AE is carefully examined, he has not only admitted the measurement book Ex.PW1/8 but has admitted that the bill regarding the Digitally signed by work order No.479 has already been passed by the defendant corporation MUKESH MUKESH and the same has also been accepted by the contractor/plaintiff. It has KUMAR KUMAR GUPTA GUPTA Date:
2024.09.28 18:08:39 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 19 of 28 also been admitted by DW1 in his cross-examination that the Ex.PW1/2 also bears the signature of contractor i.e. the plaintiff herein though he did not identify the same. If the bill is carefully scrutinized and as already discussed they contain not only the details of work, rates on which the work was completed but also the total amounts against each work order. The bill has been signed by the concerned JE, the Assistant Account Officer and even the Executive Engineer on behalf of the Commissioner MCD which clearly indicates that this bill has been duly approved by the competent officers of the defendant corporation who are duly authorised not only to verify and check the same but also approve the same. This bill is admittedly based on the measurement book Ex.PW/8 which contains the details and particulars of work done duly cross-checked by the officers of defendant corporation after physical verification at the site. This bill has admittedly been also given to the plaintiff after his signatures on the same. It is not the case of the defendant that this bill Ex.PW1/2 of the measurement book Ex.PW1/8 has been obtained by the contractor through illegitimate means or through illegal access. It is unfathomable for the court to understand as to how the defendant corporation will reach this stage of preparation, cross-verification and approval of the bills without the necessary formalities being completed by the plaintiff/contractor. Thus, taken on the yardstick of preponderance of probabilities, Ex.PW1/2 cannot be merely called an internal noting of the department but is a document to which the plaintiff is clearly also a party.
Digitally signed by MUKESH MUKESH KUMAR 26. It is further not in dispute and is rather an admitted fact during KUMAR GUPTA GUPTA Date:
2024.09.28 18:08:48 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 20 of 28 +0530 cross-examination of DW1 Shri Kapil Kumar that this bill was prepared, cross-checked and has been prepared after verification on the basis of the measurement book Ex.PW1/8. It is also an admitted case of the defendant that there is no labour complaint pending or received against the plaintiff in respect of the work orders in question. Thus, taken comprehensively the defendant has though admitted the liability on satisfaction of the works covered by the work order Ex.PW1/1 but is deliberately denying the claim of the plaintiff on the technical plea of non-submission of bill. Certainly law and equity cannot permit the same to happen, more so, when there is clear admission of completion of work without any complaint or lack of compliance and even the liability by the corporation. The defendant has admittedly failed to show any document on record showing failure of compliance or guidelines at the end of the plaintiff.
27. Though the defendant has taken the defence that plaintiff is not entitled for the amount as he had not complied with the contractual obligations and had failed to submit the final bill as required under clause 7 and clause 9 of GCC and clause 4 of the work order. It was also submitted that the plaintiff also failed to comply with clause 17 and 45 of GCC for refund of the security deposit and did not apply for the labour clearance certificate. Ld. Counsel for the defendant relied upon the judgment of Hon'ble High Court of Delhi in North Delhi Municipal Corporation Vs. Sanjeev Kumar (RFA 430/2016) in support of his Digitally arguments. It was also argued that unless the provision of clause 17 and signed by MUKESH MUKESH KUMAR KUMAR GUPTA 45 of GCC are complied with, the claim for refund of the security deposit GUPTA Date:
2024.09.28 18:08:57 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 21 of 28 is pre-mature and untenable.
28. As already held in the foregoing paras, admittedly the plaintiff had completed the works awarded to him pursuant to work order Ex.PW1/1 and even the bill has been prepared, verified and passed by the defendant corporation on 26.11.2019. The defendant has admitted its liability by preparing and passing of the bills Ex.PW1/2 which were counter signed by the plaintiff in token of its correctness.
29. As regards the amount of Rs.4,35,824/- withheld by the defendant in the bills Ex.PW-1/2 , DW-1 Shri Kapil Kumar in his cross examination has admitted that this amount was withheld qua the work order No.479. It is now more than 5 years that the work has been completed and defect liability period has also expired and there is no complaint qua the work done by the plaintiff. The bill in question Ex.Pw1/2 covering the amount of work done have admittedly been prepared by the defendant. The plaintiff on his part has issued a legal notice under Section 477 & 478 of DMC Act, dated 02.03.2021 Ex.PW1/3, the receipt of which has not been disputed or denied by the defendants in their affidavit of Admission Denial of documents but have merely mentioned that GCC was not complied with. The plaintiff has made request for passing of the bills and release of payment in respect of the works completed pursuant to the work order Ex.PW1/1 awarded to him.
Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.09.28 30. In so far as the refund of the security deposit of Rs.39,844/- against 18:09:07 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 22 of 28 the work order is concerned, PW-1 Shri Rajesh Kumar Gupta, the plaintiff has categorically deposed that the same was not refunded despite satisfactory completion of the work covered under work order Ex.PW1/1. On the other hand defendant has claimed non-compliance of clause 17 & 45 of GCC.
31. Perusal of clause 17 of GCC makes it clear that plaintiff cannot claim the security deposit before the expiry of 12 months after the issue of the final certificate of completion of the work or till the time final bill has been prepared and passed, whichever is later. Clause 45 of the GCC also provides that security deposit of the work will not be refunded till the contractor produces a clearance certificate from the labour office.
However, it further says that if no complaint is pending on record till after three months after completion of the work and/or no communication is received from the labour officer to this effect till 6 months after the date of completion, it will be deemed to have received the clearance and the security deposit will be released, if otherwise due.
32. In the present case, the works were completed by the plaintiff and the bills were prepared and passed by the defendant on 26.11.2019. A period of almost 5 years has expired from the date of completion of work. Admittedly, there is no complaint regarding the quality of work done by the plaintiff nor there is any complaint against the plaintiff regarding any labour dispute in respect of the aforesaid work order Ex.PW1/1 (the maximum period for which was 6 months). A Digitally considerable time has expired since the contract was completed and signed by MUKESH MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2024.09.28
18:09:16
+0530
CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 23 of 28 admittedly there is no claim made by the defendant on account of any acts of commission or omission on the part of the plaintiff. DW-1 Shri Kapil Kumar has also admitted in his cross examination that there are no labour complaints in respect of the work order Ex.PW-1/1 . Hence, there are no grounds for the defendant to withhold the security amount of the plaintiff. Accordingly, taken on the yardstick of preponderance of probabilities and in view of oral as well as documentary evidence which has come on record, the plaintiff has been successful in discharging the onus for his entitlement.
33. In view of the aforesaid discussions and findings, this issue is decided in favour of the plaintiff and against the defendant and it is held that the defendant was under legal obligation to pay outstanding amount of Rs..4,35,824/-, as also refund the security deposit of Rs.39,884/-which the defendant has failed to pay despite service of legal notice darted 02.03.2021 Ex.PW1/3 which is due and outstanding against the defendants. Therefore, the plaintiff is entitled to recover and an amount of Rs.4,35,824/- + Rs.39,884/- ( Earnest Money) from the defendant. This issue is decided accordingly.
Issue no.2: "Whether the plaintiff is entitled to recover any interest from the defendant, if so, at what rate and for what period ?OPP"
34. The onus to prove this issue was on the plaintiff. The plaintiff has claimed pendente lite and future interest @ 12% per annum on the due Digitally signed by amount of Rs.4,35,824/- from passingof the bill i.e. 26.11.2019 till its MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2024.09.28 realization.
18:09:25 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 24 of 28
35. Ld. Counsel for the plaintiff has argued that defendant has illegally withheld the amount of bills. It is further argued that the plaintiff has suffered financial losses as defendant failed to release the payments within a period of 6/9 months as required under clause 9 of GCC and hence, the plaintiff is entitled for the interest on the delayed payment.
36. Ld. Counsel for the defendant has argued that plaintiff is claiming interest on the decreetal amount without submitting the requisite documents and compliance of terms and conditions of GCC.
37. Ld. Counsel for the plaintiff has, however failed to establish the basis the interest is being claimed @ 12% per annum by the plaintiff. In NDMC & Others Vs. Shish Pal MANU/DE/1200/2018, it was observed that:-
"45. In the present case, the combined effect of the Clauses and the Circular and amendments, set out above, is that if the Corporation does not procure funds, it is not liable to even pay the Contractor any interest and the Contractor has no remedy. This by itself would mean that such a Clause could be read as leading to a contract without consideration and hence unlawful under Section 23 of the Contract Act.
The Corporation being an instrumentality of State, such a contract would also be opposed to public policy under Section 23 of the Contract Act. Section 46 of the Contract Act is also clear Digitally signed that if no time for performance of a contract is MUKESH by MUKESH KUMAR GUPTA specified, it has to be performed within a KUMAR GUPTA Date:
2024.09.28 reasonable time. Reading these provisions 18:09:34 +0530 together, it is clear that an open ended Clause CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 25 of 28 which in effect says that the payment shall be made at an undetermined time in the future, subject to availability of funds, in a particular head of accounts is wholly unreasonable and such a term would also be unfair.....
71. A conjoint reading of Clauses 7 & 9 along with the amendment dated 19th May, 2006, clearly shows that for the payment of bills, the Contractors have to follow the queue basis and as and when the amount is available under the particular head of account, the amount would be payable. The amendment does not, however, have a condition that no interest is payable for delayed payment. Such a condition exists only in Clause 7. Clause 9, therefore, when read with the amendment has to mean that the Corporation itself considers 6 months and 9 months to be the reasonable periods for which the payments of the final bills can be held back. Obviously, therefore, if payments are made, whether on a queue basis or otherwise, beyond the period of 6 months and 9 months, interest is payable.
72. In view of the question of interest having been gone into detail and non-payment having been held to be illegal by various Single Judges of this Court, in cases involving the Corporations, it is held that non-payment of interest beyond the period of 6 months and 9 months, as stipulated in Clause 9 of the General Conditions of Contract, would be contrary to law. Hence, the Contractors are entitled for payment of interest after a period of 6 months - 9 months respectively."
38. The award of interest is discretionary as the contract nowhere Digitally signed by MUKESH KUMAR MUKESH KUMAR GUPTA Date:
mentions about the rate of interest, each case has to be adjudged on its GUPTA 2024.09.28 18:09:43 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 26 of 28 own merit. Keeping in view the facts and circumstances of this case, this court is not inclined to grant pre suit interest to the plaintiff which in any case the plaintiff has not claimed in the suit.
39. However, this court is of the considered opinion that the interest of justice would be subserved if the plaintiff is awarded simple interest @ 6% per annum on the amount of Rs.4,75,708/- from 60 days of the date of passing of bill i.e. 26.11.2019 till filing of the suit and thereafter an interest @ 7.5% pendelite & future from the date of filing of th suit till its realization. Reliance placed on Pt. Munshi Ram @ Associates (P) Lt.
Vs. DDA, 2010 SCC Online Delhi 2444, Rajendra Construction Co. Vs. Maharashtra Housing & Area Development Authority and others, 2005 (6) SCC 678, McDermott International Inc. Vs. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State Road Transport Corporation Vs. Indag Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd. Vs. G. Harischandra, 2007 (2) SCC 720 & State of Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC). This issue is, accordingly decided in favour of the plaintiff and against the defendants.
(I) CONCLUSION:-
ISSUE No.3: Relief.
40. In view of the aforesaid discussions and finding of the court on the aforesaid issues, the court is of the considered opinion that the plaintiff has been able to successfully prove its entitlement to the Digitally signed by MUKESH KUMAR MUKESH KUMAR GUPTA recovery against the defendant. The suit of the plaintiff is, accordingly GUPTA Date:
2024.09.28 18:09:51 +0530 CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 27 of 28 decreed against the defendant for a sum of Rs. 4,75,708/-. The plaintiff shall also be entitled to a simple interest @ 6 % per annum from 25.01.2020 (i.e. the date of expiry of 60 days of passing the bill dated 26.11.2019) till filing of the suit and 7.5% per annum pendentlite and future on decreetal amount from the date of filing of the present suit till till its realization.
41. In the specific facts and circumstances of the case, the plaintiff shall also be entitled to the costs of the suit throughout.
42. Decree sheet be drawn accordingly.
43. File be consigned to record room after due completion.
PRONOUNCED IN OPEN COURT .
Digitally signedOn this 28th September, 2024 MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2024.09.28 18:09:59 +0530 (MUKESH KUMAR GUPTA) DISTRICT JUDGE (COMM. COURT)-07 CENTRAL/DELHI(pk) CS (Comm.) No. 1124/2023 Rajesh Kumar Gupta Vs. Municipal Corporation o f Delhi & Anr. Page no. 28 of 28