Delhi District Court
Parveen Kumar vs Municipal Corporation Of Delhi on 4 October, 2023
DLCT010168542022
IN THE COURT OF SH. SANJEEV KUMAR AGGARWAL : DISTRICT
JUDGE (COMM.) 01 : CENTRAL, TIS HAZARI COURTS, DELHI
CS (Com.) No. 2653/2022
Sh. Parveen Kumar,
Sole Proprietor,
M/s. P.K. Sehrawat & Co.,
1162, Near Dhobi Chaupal,
New Syndicate Bank,
Village Bawana, Delhi - 110039. ..... Plaintiff.
Versus
1. Municipal Corporation of Delhi,
Through, Commissioner,
Civic Center, Minto Road,
Delhi - 110002.
2. The Executive Engineer (MI) KPZ,
Municipal Corporation of Delhi,
Near Mini Stadium, Lawrence Road,
New Delhi - 110027. .... Defendants.
Suit (Com.) No. 2653/2022 Page No. 1 of 26
Parveen Kumar Vs. MCD & Anr.
SUIT FOR RECOVERY OF RS. 81,80,530/.
Date of institution : 09.12.2022
Date of reserving Judgment : 10.07.2023
Date of decision : 04.10.2023
JUDGMENT
1. Vide this Judgment, I shall decide the present suit filed by the plaintiff against the defendants for recovery of amount of Rs. 81,80,530/ along with pendente lite and future interest.
2. Brief facts as stated in the plaint are that plaintiff is the sole proprietor of M/s. P.K. Sehrawat & Co., a firm duly enrolled as Municipal Contractor with the defendant corporation South Delhi Municipal Corporation (which is now MCD) and is engaged in the civil nature of work of South Delhi. It is stated that defendant No. 1 is a body corporate of State of Delhi, established and governed under MCD Act.
3. It is stated that the plaintiff being Government Contractor approached for the work order through tender which was invited by the defendant No. 2 and defendant No. 2 after satisfaction of the completion of the required conditions at the stage of prework order, awarded work orders No. 61 and 62 both dated 22.7.2016 and 186, 187, 188 all dated 30.1.2017 and 202 and 203 both dated 7.2.2017 and 253, 254, 255 and 256 all dated 7.3.2017 to the plaintiff.
Suit (Com.) No. 2653/2022 Page No. 2 of 264. It is further stated that the said works were completed by the plaintiff to the satisfaction of EngineerinCharge / defendant No. 2 and the period prescribed for defect liability also passed over without any negative remark. It is further stated that defendant no. 2 completed the final measurement of the aforesaid work and first and final bills pertaining to the aforesaid work orders were passed and recorded in the measurement book. The details of amount of bills, date of passing and amount of security / earnest money are as follows : Sr. Work Amount of Date of passing Amount of No. Order No. passed bills of bill security deposit (Rs.) (Rs.)
1. 61 7,12,817/ 31.3.2017 1,31,802/
2. 62 3,25,297/ 30.12.2016 60,100/
3. 186 3,79,249/ 30.5.2017 78,479/
4. 187 4,00,036/ 30.5.2017 76,228/
5. 188 2,44,926/ 30.5.2017 47,854/
6. 202 8,80,500/ 23.2.2018 1,14,500/
7. 203 8,79,980/ 23.2.2018 1,20,020/
8. 253 13,56,923/ 23.2.2018 1,83,244/
9. 254 12,42,596/ 22.2.2018 1,66,311/
10. 255 3,72,252/ 23.5.2017 74,212/
11. 256 2,77,577/ 23.5.2017 55,629/ TOTAL 70,72,151/ 11,08,379/ Grand total of 70,12,151 + 11,08,379 81,80,530/ passed bills and security amount Suit (Com.) No. 2653/2022 Page No. 3 of 26 Parveen Kumar Vs. MCD & Anr.
5. It is further stated that despite passing of aforesaid bills, neither the aforesaid payments were released to the plaintiff nor he was informed about the reason for withholding the payment. The plaintiff made several requests for release of said amount but the aforesaid sum of Rs. 81,80,530/ was not released by the defendants to the plaintiff. Hence, the total amount of passed bills withheld by the defendants comes to Rs. 81,80,530/. Plaintiff is also entitled to interest @ 12% per annum on the said amount from 1.8.2020.
6. It is further stated that despite passing of the aforesaid bills, defendant corporation did not release the payment to the plaintiff, though as per clause 9 of General Terms and Conditions of the defendants, the defendants are liable to release the payment of the passed bills within a period of 6/9 months, therefore, plaintiff being aggrieved sent legal notice dated 8.8.2021 demanding release of aforesaid payment however the defendants neither paid the said amount nor replied to said notice. Hence, the present suit has been filed by the plaintiff against the defendants for recovery of interest on first and final bill amount along with interest thereon.
7. Summons of the suit were sent to the defendants and defendants contested the same by filing written statement. In the written statement, defendants have admitted awarding of work orders in question but denied that defendant has passed the bill of Rs. 81,80,530/ and has to released the said amount. Further, the defendants have denied that it is liable to pay interest @ 12 % per annum on delayed payment. It is also denied that plaintiff suffered loss in terms of money Suit (Com.) No. 2653/2022 Page No. 4 of 26 Parveen Kumar Vs. MCD & Anr.
and further investment.
8. Admission / denial of documents were also done by both the parties.
9. After completion of the pleadings, following issues were framed for consideration on 20.2.2023 :
1. Whether the present suit is time barred? OPD.
2. Whether the plaintiff is entitled for recovery of Rs. 81,80,530/ as principal amount? OPP.
3. Whether the plaintiff is entitled to interest on the aforesaid amount? If so, at what rate and for which period? OPP.
4. Whether the plaintiff is entitled to pendente lite and future interest? If so, at what rate and for which period? OPP.
5. Whether the plaintiff has submitted the bills for payment of the work done by him? If not, what effect? OPP.
6. Whether the plaintiff has complied with the clauses 17 & 45 of GCC? If not, what effect?
7. Relief.
10. In order to prove his case, the plaintiff has examined only one witness i.e. himself as PW1 and led his evidence through affidavit Suit (Com.) No. 2653/2022 Page No. 5 of 26 Parveen Kumar Vs. MCD & Anr.
Ex. PW1/A.
11. On the other hand, in order to deny the claim of plaintiff, defendants have examined Sh. Suresh Dua, Assistant Engineer (MI), Keshav Puram Zone as DW1 who led his evidence by way of affidavit Ex. DW1/A.
12. Arguments heard from Sh. S.K. Singh, Ld. Counsel for the plaintiff and from Sh. Sanjeet Malik, Ld. Counsel for the defendants.
13. I have considered the arguments and have gone through the record. My issue wise findings are as follows : ISSUE NO. 1.
Whether the present suit is time barred? OPD.
14. Ld. Counsel for defendant has argued that present suit was filed on 09.12.2022. Since suit for recovery of money can be filed with in three year from the date when work was completed therefore recovery of work order no. 62 is barred by limitation as limitation period expired for said work order was completed on 27.10.2016.
15. On the other hand Ld. Counsel for plaintiff has argued that period of limitation is to counted from the day when amount become due and since defendant has prepared the final bill qua work order no. 62 on 31.03.2017 therefore Limitation period expire qua said bill on 30.03.2020 whereas with respect to other work orders date of completion qua other bill is after 15.03.2017 hence about these work orders limitation would expire after 15.03.2020 and since period from 15.02.2020 to 28.03.2022 Suit (Com.) No. 2653/2022 Page No. 6 of 26 Parveen Kumar Vs. MCD & Anr.
hence said period is to be excluded and plus plaintiff would be entitle to remaining period to file suit in view of judgement of Hon,ble Supreme Court in Court On its Own Motion CWP 3/20 dt xxxx and suit has been filed therefore suit is with in Limitation.
16. I have heard the arguments and have gone through the record.
17. The period of limitation to recover amount of work done is three year from the date of completion of work where no time has been fixed for payment of work as per Entry 18 of schedule of Limitation Act, 1963. It is undisputed fact GCC govern the terms and condition of work awarded to the plaintiff by defendant. Clause 7 and 9 deals with payment of bills. Clause 7 of the GCC which deals with interim/ or running bill is reproduced as under : "CLAUSE 7 Payment on Intermediate Certificate to be Regarded as Advances:
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 esti mated to cost over Rs. twenty thousand, the in terim or running account bills shall be submitted by the contractor for work executed on the basis of such recorded measurement on the format of the department in the triplicate on or before the date of every month of the fixed for the same by Suit (Com.) No. 2653/2022 Page No. 7 of 26 Parveen Kumar Vs. MCD & Anr.
the EngineerinCharge. The contractor shall not be the entitled to be paid any such interim pay ment if the gross work done together with the note payment/adjustment of advances of material col lected, 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. Engineerincharge shall ar range to have the bill verified by taking or causing to be taken, where necessary, the requisite mea surement of the work. In the event of the failure of the contractor to submit the bills. progress is achieved. EngineerinCharge shall prepare or cause to be prepared such bills in which event no claims whatsoever due to delays on payment in cluding that of interest shall be payable to the con tract. Payment on account of admissible shall be made by the EngineerinCharge certifying the sum to which the contractor is considered entitled by the way of interim payment at such rates as decided by the EngineerinCharge. The amount admissible shall be paid by the 30th working day after the day of presentation of the bill by the con tractor to the EngineerinCharge of his Asst. En gineer together with the account of the material is issued by the department, or dismantled materi als, 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 the i.e. first the past liabilities will be cleared and after that Suit (Com.) No. 2653/2022 Page No. 8 of 26 Parveen Kumar Vs. MCD & Anr.
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 nonavailability of fund in the particular head of account of the MCD.
All such payment shall be regarded as payments by way of advances against final payment only and shall not preclude the requiring of bad, un sound and imperfect or unskilled work to be re jected, removed, taken away and reconstructed or reerected. Any certificate given by the Engineer inCharge relating to the work done or materials delivered forming part of such payment, may be modified or corrected by any subsequent such certificates(s) or by the final certificate and shall not by itself be conclusive evidence that any work or materials to which it relates is/are in accor dance with the contract and specifications. Any such interim payment or any part thereof shall not it any respect conclude, determine or effect in any way powers of EngineerinCharge under the con tract or any of such payments be treated as final settlement and adjustment of accounts or in any way vary or effect the contract.
Pending consideration of extension of date of completion interim payments shall to be made as herein provides, without prejudice to the right of the departments to take action under the terms of Suit (Com.) No. 2653/2022 Page No. 9 of 26 Parveen Kumar Vs. MCD & Anr.
this contract for delay in the completion of work, if the extension of date of completion is not granted by the competent authority.
The EngineerinCharge in his sole discretion on the basis of a certificate from the Asstt. Engi neer to the effect that the work has been com pleted upto the level in question make interim ad vance payments without detailed measurements for work done (other than foundations, items to be covered under finishing items) upon lintel level (in cluding sunshade etc.) and slab level, for each floor working out at 75% of the assessed value. The advance payment so allowed shall be ad justed in the subsequent interim bill by taking de tailed measurements thereof".
18. Clause 9 of GCC deals with final bill which is reproduce as below:
"CLAUSE9 The final bill shall be submitted by the contractor in the same manner as specified in interim bills within three months of physical completion of the work or within one month of the date of the final certificate of completion furnished by the EngineerinCharge whichever is earlier. No 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 EngineerinCharge, will, as far as possible be Suit (Com.) No. 2653/2022 Page No. 10 of 26 Parveen Kumar Vs. MCD & Anr.
made after the period specified hereinunder the pe riod being reckoned from the date of receipt of bill by the EngineerinCharge or his authorised 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 re ceived at the HQ and the particular head of ac count. No interest shall be payable to the con tractor 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"
19. From perusal of clause 9 of GCC, it is evident that the payment of final bill is to be made by the defendant only after submissions of the final bill by the contractor within three months of physical competition of work or within one month date of final certificate of completion of work furnished by the engineer incharge and as per various Judgments given by Hon'ble High Court, the plaintiff will be entitled to interest on the amount due of bill if defendant fails to make the payment within six months where the amount upto Rs. 5 lakhs or within nine months where Suit (Com.) No. 2653/2022 Page No. 11 of 26 Parveen Kumar Vs. MCD & Anr.
the amount exceeding Rs. 5 lakhs.
20. Hence from the aforesaid clause 7 and 9, it is evident that contractor can file the bill for payment with in three months of completion of work or with one month issuance of completion certificate. The plaintiff through evidence affidavit of PW1 has deposed that he was award work vide work order No.61 and 62 dated 22.07.2016. In the first bill prepared by defendant Ex. PW1/12 regarding work order No. 61 date of completion of work is mentioned as 13.01.2017. Hence work was competed on 13.01.2017. Running bill was prepared by the engineer in charge on 27.02.2017 therefore, payment of running bill was to be made by 09.03.2017 hence, period of limitation would commence from 9.3.2017 and expire on 8.3.2020.
21. The period of limitation would be extended upto 31.5.2022 in view of Judgment passed by the Hon'ble Supreme Court passed in Suo Motu writ petition (C) No. 3/2020 dated 10.01.2022 wherein the Hon'ble Court has excluded the period from 15.2.2020 till 28.2.2022 + 90 days more where period of Limitation already expired due to corona pandemic. Relevant portion of the said Judgment is reproduced hereunder : "5.Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in Suit (Com.) No. 2653/2022 Page No. 12 of 26 Parveen Kumar Vs. MCD & Anr.
continuation of the subsequent orders dated 08.03.2021, 27.04.2021and 23.09.2021, it is directed that the period from15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022,notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings".
22. In view of aforesaid facts and Judgment, I hold that after excluding the period from 15.2.2020 till 29.5.2022 recovery of amount of said bill has been filed with in three year as suit was filed 09.12.2022 and thus not barred by limitation. As far as other bills Ex. PW1/13 to PW1/22 Suit (Com.) No. 2653/2022 Page No. 13 of 26 Parveen Kumar Vs. MCD & Anr.
are concerned since same have been prepared after said bills therefore said bills natural same will also be with in limitation. Therefore I held that suit is not barred by limitation. Issue no. 1 is decided accordingly in favour of plaintiff and against the defendant.
ISSUES NO. 2, 3, 4, 5 and 6.
Whether the plaintiff is entitled for recovery of Rs. 81,80,530/ as principal amount? OPP;
Whether the plaintiff is entitled to interest on the aforesaid amount? If so, at what rate and for which period? OPP;
Whether the plaintiff is entitled to pendente lite and future interest? If so, at what rate and for which period? OPP;
Whether the plaintiff has submitted the bills for payment of the work done by him? If not, what effect? OPP; and Whether the plaintiff has complied with the clauses 17 & 45 of GCC? If not, what effect?
23. Since all these issues are interconnected therefore, I shall decide all these issues simultaneously. In his evidence affidavit PW1 has almost repeated same contents as stated in the plaint therefore same are not repeated here. He has relied upon the following documents :
1. Copy of work order No. 61 dated 22.7.2016 as Ex.
PW1/1.
2. Copy of work order No. 62 dated 22.7.2016 as Ex.
PW1/2.
3. Copy of work order No. 186 dated 30.1.2017 as Ex.
Suit (Com.) No. 2653/2022 Page No. 14 of 26PW1/3.
4. Copy of work order No. 187 dated 30.1.2017 as Ex.
PW1/4.
5. Copy of work order No. 188 dated 30.1.2017 as Ex.
PW1/5.
6. Copy of work order No. 202 dated 7.2.2017 as Ex.
PW1/6.
7. Copy of work order No. 203 dated 7.2.2017 as Ex.
PW1/7.
8. Copy of work order No. 253 dated 7.3.2017 as Ex.
PW1/8.
9. Copy of work order No. 254 dated 7.3.2017 as Ex.
PW1/9.
10. Copy of work order No. 255 dated 7.3.2017 as Ex.
PW1/10.
11. Copy of work order No. 256 dated 7.3.2017 as Ex.
PW1/11.
12. Copy of bill No. 26873 qua work order No. 61 for first running bill for amount of Rs. 6,66,805/ and second bill amounting Rs. 4,60,12/ as Ex. PW1/12 (Colly.).
13. Copy of bills No. 26874 qua work order No. 62 as Ex.
PW1/13.
14. Copy of bill No. 28954 qua work order No. 186 as Ex.
PW1/14.
15. Copy of bill No. 28952 qua work order No. 187 as Ex.
Suit (Com.) No. 2653/2022 Page No. 15 of 26PW1/15.
16. Copy of bill No. 28953 qua work order No. 188 as Ex.
PW1/16.
17. Copy of bill No. 32141 qua work order No. 202 as Ex.
PW1/17.
18. Copy of bill No. 32565 qua work order No. 203 as Ex.
PW1/18.
19. Copy of bill No. 32586 qua work order No. 253 as Ex.
PW1/19.
20. Copy of bill No. 31183 qua work order No. 254 as Ex.
PW1/20.
21. Copy of bill No. 25946 qua work order No. 255 as Ex.
PW1/21.
22. Copy of bill No. 27716 qua work order No. 256 as Ex.
PW1/22.
23. Copy of clause - 9 of GCC as Ex. PW1/23.
24. Copy of legal notice dated 10.9.2021 as Ex. PW1/24.
24. In his cross examination he admitted that he has not submitted any bills with respect to work order in question and has not obtained labour clearance certificate and completion certificate.
25. On the other hand DW1 Sh. Suresh Dua in his examination in chief led through affidavit EXDW1/A has deposed that plaintiff was awarded work vide work order no. 61, 62 both dt. 22.07.2016. 186,187, and 188 all dt. 30.01.2017 202 and 203 both dt. 07.02.2017 and 253, 254, 255 and 256 all dt. 07.03.2017 but plaintiff has not submitted any Suit (Com.) No. 2653/2022 Page No. 16 of 26 Parveen Kumar Vs. MCD & Anr.
bills which he is contractually required to as per GCC clause 7 and 9. He denied that defendant admitted a sum of Rs. 8180530/ and reiterate that unless final bill is submitted no amount is either due or payable.
26. In his cross examination he admitted that defendant has prepared and passed a sum of Rs. 7072151/. The bill were prepared as per measurement book. No labour complaint has been received against the plaintiff.
27. It is argued by Ld. Counsel for the plaintiff that from the testimony of PW1 it is proved that the plaintiff was awarded work vide work order vide work order EXPW1/1 to EXPW1/11 and the plaintiff completed the work in time. The defendant prepared the bill EXPW1/12 to EXPW1/22. The defendant was required to pay the bill amount with in 6 or 9 months of preparation of final bill as per clause 9 of GCC but defendant failed to make the payment in stipulated time hence, the plaintiff is entitled to recover the suit amount with interest @ 12% per annum on outstanding principal amount of bill from the date of passing of the bill and release of security amount amount/ earnest money.
28. On the other hand, Ld. Counsel for the defendant has argued that since the plaintiff has not submitted any bill therefore, the plaintiff is not entitled to the suit amount as per clause 7 and 9 and further, claim of plaintiff is premature in this regard since the plaintiff has no submitted the completion certificate and the labour clearance certificate as required under Clause 17 and 45 of the GCC therefore, the plaintiff is not entitled to the security amount and earnest money.
Suit (Com.) No. 2653/2022 Page No. 17 of 2629. I have heard the argument and gone through the record. Since both parties have relied upon clause 7 and 9 of GCC for claiming/ denying the interest. From clause 7, it is evident that where amount of work is Rs. 20,000/ or more, running / interim bill each month before the expiry of date fixed by the Engineer Incharge, is to be submitted by the contractor and if contractor does not submit the bill engineer in charge can prepare the bill suo moto, which is to be paid to the contractor every month before the date fixed by the Engineer in charge. Further this clause provides that in case contractor does not submits bill and Engineer in charge prepare running bill suo -moto in that event interest will not be payable.
30. From perusal of clause 9 of GCC, it is evident that the payment of final bill is to be made by the defendant only after submissions of the final bill by the contractor within three months of physical competition of work or within one month date of final certificate of completion of work furnished by the engineer incharge and as per various Judgments given by Hon'ble High Court, the plaintiff will be entitled to interest on the amount due of bill if defendant fails to make the payment within six months where the amount upto Rs. 5 lakhs or within nine months where the amount exceeding Rs. 5 lakhs. Even Hon'ble Delhi High Court while deciding the various appeal i.e. RFA No. 160/2017, 167/2017 etc. has made guideline for payment of contractor bills vide order dated 22.3.2018 which are as under:
Suit (Com.) No. 2653/2022 Page No. 18 of 26Parveen Kumar Vs. MCD & Anr.
1. On the award of the Work order, periodic inspections of the work being carried out should be done by the Engineerin Charge;
2. If possible, photographs of the works at different stages should be taken and maintained on the record;
3. Interim bills should be submitted by the Contractor - duly certifying the work which has been carried out;
4. Final bills should be submitted by the Contractor - duly certifying the work carried out along with photographs;
5. The Bill should be scrutinized by the EngineerinCharge, works should be recorded in the measurement book and thereafter, the bill should be passed;
6. Once the Bill is passed, the payment schedule of 6 months and 9 months should be adhered to. Delay in payments would result in Interest being levied;
7. For refunds of Security deposit and Earnest Money de posit, the Contractor should unscrupulously comply with the conditions in Clauses 17 and 45. For refunds to be made, payment of final bill need not be awaited. Once the conditions of Clauses 17 and 45 are complied with and the final bill is passed, refunds ought to be made;
8. In suits relating to recovery of Contractor‟s dues, all the evidence including the NIT, General Conditions of Con tract, periodic inspection reports, Final bill as submitted, Suit (Com.) No. 2653/2022 Page No. 19 of 26 Parveen Kumar Vs. MCD & Anr.
Final bill as passed, Measurements carried out, Photo graphs etc., should be produced and duly exhibited.
9. IT infrastructure ought to be created to maintain records of the work orders, inspection reports, final bills, photographs etc., digitally, as it is noticed that the trial court record does not contain all the relevant documents and in several cases, different versions of clauses are relied upon by both sides, bills are not properly understandable and there is no evidence of actual inspections or measurements having been taken. Maintenance of digital records will make it more transparent and easily accessible for the officials and for production in the Court in case of future litigation.
31. From the aforesaid guidelines, it is evident that plaintiff was required to submit both running bill and final bill but the defendant can prepare the running bill suo motu if same is not submitted but there is no provision for suo motu preparation of final bill however, Hon'ble High Court has also allowed the appeal bearing RFA No. 430/2017 titled as North Delhi Municipal Corporation & Anr. Vs. Sanjeev Kumar on 22.3.2018 granting payment of final bill despite the objection of the respondent that plaintiff has not submitted the final bill. Since all the bills are prior to the issuance of aforesaid guidelines by the Hon'ble High Court in RFA No. 160/2017 etc. therefore, considering the said guidelines, I held that the plaintiff is entitled to recover the bills amount despite the fact that the plaintiff did not submit the bills.
Suit (Com.) No. 2653/2022 Page No. 20 of 2632. Now reverting back to the case. From perusal of bills Ex. PW1/12 (Colly.) to Ex. PW1/22, it is evident that these are the running bills and final bills qua work orders Ex. PW1/1 to Ex. PW1/11, details of which are as under : S. Work Dated Total payable Total payable Security No. Order running bill final bill amount amount (Rs.) No. amount after after security security amount, tax and amount, tax other deductions and other deductions
1. 61 22.7.2016 6,66,805/ 46,012/ 66,545/
2. 62 22.7.2016 3,25,297/ 30,339/
3. 186 30.1.2017 3,79,249/ 36,573/
4. 187 30.1.2017 4,00,036/ 38,126/
5. 188 30.1.2017 2,44,924/ 23,278/
6. 202 7.2.2017 8,80,500/ 76,800/
7. 203 7.2.2017 8,79,980/ 76,700/
8. 253 7.3.2017 13,56,923/ 1,24,517/
9. 254 7.3.2017 12,42,596/ 1,13,180/
10. 255 7.3.2017 3,72,252/ 35,746/
11. 256 7.3.2017 2,77,577/ 26,621/ Total 29,04,228/ 41,67,923/ 6,48,425/ Total payable running and final bill amount = Rs. 70,72,151/.
34. Hence, I held that the plaintiff is entitled to recover the amount of Ex. PW1/12 to Ex. PW1/22 i.e. a total amount of Rs. 70,72,151/ from the defendant.
Suit (Com.) No. 2653/2022 Page No. 21 of 2635. Further as far as release of security amount is concerned, Clause 17 and Clause 45 are relating to refund of security deposit which are reads as under:
"CLAUSE 17 Contractor liable for damages, defects during maintenance period :
If the contractor or his working people or servants shall break, deface, injure or destroy any part of building in which they may be working, or any building, road, road kerb, fence, enclosure, water pipe, cables, drains, electric or telephone post or wires, trees, grass or grassland, or cultivated ground contiguous to the premises on which the work or any part is being executed, or if any damage shall happen to the work while in progress, from any cause whatever or if any defect, shrinkage or other faults appears in the work within twelve months (six months in the case of work costing Rs.5.00 lacs and below except road work) after a certificate final or otherwise of its completion shall have been given by the Engineerin Charge as aforesaid arising out of defect or improper materials or workmanship the contract shall upon receipt of a notice in writing on that behalf make the same good at his own expense or in default the EngineerinCharge cause the same to be made good by other workmen and deduct the expense from any sums that may be due or at any time thereafter may become due to the contractor, or from his security deposit or the proceeds of sale thereof or of a sufficient portion thereof. The security deposit of the contractor shall not be refunded before the expiry of twelve months (six months in the case of work costing Rs.5.00 lacs except dense carpet works) after the issue of the certificate final or otherwise, of completion of work or till the final bill has been prepared and passed whichever is later. In case of dense carpet works the Security Deposit of the contractor shall not be refunded before the expiry of 5 & 7 Suit (Com.) No. 2653/2022 Page No. 22 of 26 Parveen Kumar Vs. MCD & Anr.
years of maintenance from last day of the month in which a particular road is completed in case of binder of penetration 60/70 grade & CRMB 60 binders respectively.
36. From the aforesaid clause 17 it is evident that security amount is not to be released to the contractor before 12 months after a certificate final or otherwise of its completion shall have been given by the Engineerin Charge or final bill has been passed which ever is later.
37. Further, Clause 45 provides that security amount is to be released after labour clearance which is reproduced as below:
CLAUSE 45 Release of Security deposit after labour clearance :
Security Deposit of the work shall not be refunded till the contractor produces a clearance certificate from the Labour Officer. As soon as the work is virtually complete the contractor shall apply for the clearance certificate to the Labour Officer under intimate on to the EngineerinCharge. The Engineer inCharge on receipt of the said communication, shall write to the Labour Officer to intimate if any complaint is pending against the contractor in respect of the work. If complaint is pending on record till after 3 months after completion of the work and/or no communication is received from the Labour Officer to this effect till six months after the date of completion it will be deemed to have received the clearance certificate and the security Deposit will be released if otherwise due."
59. Clauses 17 and 45 relating to security deposits have also been interpreted in the Circular dated 10th June 2014, as under:
"Clause 17: The security deposit shall not be refunded before expiry of one year from the date of completion of work. Clause 45: Security deposit shall not be refunded till the Suit (Com.) No. 2653/2022 Page No. 23 of 26 Parveen Kumar Vs. MCD & Anr.
contractor produces clearance certificate from the Labour Officer."
38. In North Delhi Municipal Corporation Vs. Sanjeev Kumar RFA No. 430/2017 dated 22.03.2018 Hon,ble High Court dealt with the issue of refund of security amount interepreted clause 17 and 45. Relevant para is reproduced as below: "59. Clauses 17 and 45 relating to security deposits have also been interpreted in the Circular dated 10th June 2014, as under:
"Clause 17: The security deposit shall not be refunded before expiry of one year from the date of completion of work.
60. A perusal of all the aforementioned Clauses reveals that:
a) For refund of security deposit, a clearance certificate is needed from the Labour Officer;
b) Once the work is completed, the Contractor would apply for the clearance certificate under intimation to the Engineerin Charge;
c) The EngineerinCharge has to communicate to the Labour Officer if there is any complaint in respect of the work executed;
d) If after completion of the work, 3 months have elapsed and no communication is received, after date of completion, there is a deemed clearance certificate and the security deposit is liable to be released.
61. Thus, irrespective of the date of payment of the principal amount, the security deposit cannot be held back beyond a period of 6 months from the date when application is made to the Labour Officer for issuance of the clearance certificate. These Clauses do not brook any delay in so far as the refund of the security deposit is concerned. Moreover, there is no clarity whatsoever as to how the refund of Security deposit is Suit (Com.) No. 2653/2022 Page No. 24 of 26 Parveen Kumar Vs. MCD & Anr.
subject to the queue system and availability of funds. The Clause itself does not contemplate any such condition. Thus, the security deposit is liable to be refunded upon the compliance of the conditions in Clauses 17 and 45 of the General Conditions of Contract".
39. From the aforesaid Judgment, it is evident that plaintiff only need to apply for labour clearance certificate and intimate the Engineer Incharge about the same and if no communication is received for three month it amount to deemed sanction and security amount is to be released.
40. Now revering back to the case, plaintiff has plaintiff is entitle to security amount only after furnishing final bill and labour clearance certificate but neither in the plaint nor has deposed in his testimony that he submitted labour clearance certificate or even he for labour clearance certificate, hence I hold that plaintiff has failed to prove that he submitted labour clearance certificate. Since plaintiff has not complied the provision of clause 17 & 45 therefore, I hold that the plaintiff is not entitle to release of earnest money/security amount of Rs. 6,48,425/ at this stage.
41. In view of above, I hold that plaintiff is only entitle to decree for recovery of the amount of Rs. 70,72,151/ from the defendant.
42. As far as grant of interest is concerned since as stated in issue no.1 that plaintiff has not submitted either running bill and final bill consequence of not submitting running bill by contractor as provided in clause 7 is that contractor will not be entitle to interest therefore, I held that plaintiff is not entitle to any interest on the decretal amount of Rs.
Suit (Com.) No. 2653/2022 Page No. 25 of 2670,72,151/ from the date of passing bill till the date of decree. However in case defendant failed to make the payment of amount as granted to the plaintiff in issue No. 1 within 90 days from the date of decree then defendant will be liable to pay interest @ 12% per annum after 90 days of date of decree till its realization from on month. Issues No. 2 to 6 are decided accordingly.
43. RELIEF.
In view of my findings on aforesaid issues No. 2, 3, 4, 5 and 6, I pass a decree for a sum of Rs. 70,72,151/ (Rupees seventy lacs seventy two thousand one hundred and fifty one only) along with an interest @ 12% per annum after 90 days from the date of decree till its realization. Plaintiff will also be entitle to proportionate cost of the suit. Decree shall be drawn accordingly. File be consigned to the record room.
Announced in the open court (Sanjeev Kumar Aggarwal) on 04.10.2023 DJ (Commercial)01, Central, THC/Delhi / 04.10.2023.
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