Delhi District Court
Delhi Development Authority vs Shri J.K. Sahni on 17 July, 2007
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IN THE COURT OF SHRI SUKHDEV SINGH: ADDL.DISTT
JUDGE, DELHI.
SUIT NO.614/2004.
DELHI DEVELOPMENT AUTHORITY,
THROUGH ITS CHIEF ENGINEER,
Delhi Development Authority,
O/O The Executive Engineer,
RPD-5, Saraswati Vihar,
Delhi. .........Plaintiff.
Versus
Shri J.K. Sahni,
Proprietor,
M/S. J.K. Construction Company.
Engineers and Contractors,
D-109, L.I.C. Colony,
Paschim Vihar,
New Delhi.
........Defendant.
Date of Institution 10-11-2004.
Judgment reserved for 17-7-07.
Judgment passed on 17-7-2007.
JUDGMENT.
Plaintiff has filed the present suit against the defendant
for recovery of Rs.17,22,576/-. Brief facts of the present case
are that the plaintiff had awarded to the defendant the work
for construction of house in Rohini, Delhi on the basis of
agreement dated 5-5-1997 entered between the parties. The
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actual work in pursuant to the tendered cost/agreement
items was Rs.1,79,20,824-37 for which 28 bills were raised
from time to time. The defendant offered a rebate of 5% on
the quoted rate which was the part of the agreement but
inadvertently the same could not be recovered from the
running bills from time to time by the plaintiff from the
defendant. When the mistake was detected, the plaintiff
vide letter dated 17-9-2002 asked the defendant to pay the
rebate amount of 5% which was offered by the defendant
and which could not be recovered inadvertently along with
interest @ 18%. The plaintiff again wrote a letter dated 28-
12-2002. It is stated that the plaintiff is entitled to the
following payments from the defendant:-
Claim No.1.
Actual work done in pursuance of the
Tendered Cost/Agreement-items.
Rs.1.79.20.824-37.
Amount of rebate @ 5% earlier not
deducted. Rs.8,96,041-22
Claim No.2.
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Extra payment made pursuant to clause
10(CC) of the agreement entered
into between the parties which is the
direct result of non deduction of rebate
of 5%. Rs.86,705.55
Claim No.3.
Payment which were due to be made
to the defendant in respect to the balance
items contained in the agreement (Page 1to 15 of the
final bill). Rs.1,96,954.88
(B) Add.
Payment of Extra/substituted item which
were due to be made to the defendant in
respect to the extra work got done from the defendant.
Rs.21,105-95
(C)
Less recovery on account of reduction
items/deduction on account of bad
quality of work as approved by the
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competent authority Rs.1,22,342.76.
(D) Less.
Amount withheld on account of certain inevitable
recoveries Rs.1,62,058/-
2. Thus, after making necessary adjustments, a sum of
Rs.66,339.93 was recoverable from the defendant, which the
defendant was liable to pay to the plaintiff.
Claim No.4.
The defendant was liable to interest @ 18% per annum
on the amount of 5% rebate. As the payment was made
from time to time to the defendant and the amount was
paid in excess to the defendant, the defendant was liable to
interest amounting to Rs.10,43,489-30. Since a sum of
Rs.3,70,000/- was deposited as security by the defendant as
such after adjustment of security in the interest component
a sum of Rs.6,73,489.30 was recoverable from the defendant
on account of interest up to the date of filing of the suit.
3. The plaintiff served upon the defendant a notice of
demand dated 15-9-2004 therein calling upon the
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defendant to pay a sum of Rs.16,84,671/- along with interest
@ 18% within 15 days of receipt of the notice. The said
notice was duly served upon the defendant. The defendant
then sent a false and frivolous reply dated 21-9-2004 and
failed to pay the amount to the plaintiff.
4. The defendant filed the written statement denying
almost all the averments made by the plaintiff in his suit. It
was submitted that the actual work envisaged under the
letter of award of work was quantified both for purposes of
execution, as also consideration payable in terms of letter of
award of work to be executed in terms of letter of award of
work. The offer of rebate could neither be accepted nor was
accepted, nor acted upon. In fact rebate was not a
condition of contract at all.
5. On the pleadings of the parties following issues were
framed:-
i. Whether the defendant has quoted rebate of 5% which
is a part of the agreement?
ii. Whether the suit is within time?
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iii To what amount if any, the plaintiff is entitled to?
iv. Relief.
6. I have heard Ld. counsels for the parties and have
perused the material placed on record. My findings on the
above issues are as follows:-
ISSUE NO.1.
7. The onus to prove this issue lies upon the plaintiff.
In support of this, it has examined Shri S.K. Gupta,
Executive Engineer, PW-1. He has stated in his testimony
that defendant Shri J.K. Sahni is the proprietor of M/S.J.K.
Construction company who has awarded to the defendant
the work for construction of houses in Rohini, Delhi on the
basis of agreement dated 5-5-1997 entered between the
parties, copy of the said agreement has been got exhibited
as Ex.PW1/1. The actual work in pursuant to the tendered
cost/agreement item was Rs.1,79,20,824-37 for which 28
bills were raised from time to time, copy of the final bill has
been got exhibited as Ex.PW1/2. It It is further deposed that
defendant offered a rebate of 5% on the quoted rate which
is the part of the agreement but inadvertently the same
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could not be recovered from the running bills from time to
time by the plaintiff from the defendant. When the mistake
was detected, the plaintiff vide letter dated 17-7-2002 and
28-12-2002asked the defendant to pay the rebate amount of 5% which was offered by the defendant and which could not be recovered inadvertently along with interest @ 18%, copy of letter dated 17-7-2002 and 28-12-2002 has been got exhibited as Ex.PW1/3 and PW1/4. He has deposed that in respect of claim No.1, since the defendant offered a rebate of 5% on the quoted rates which is the part of the agreement but inadvertently the same could not be recovered from the running bills from time to time by the plaintiff from the defendant. The plaintiff is entitled to the sum of Rs.8,96,041.22 + amount paid to the defendant in accordance with clause 10 C.C of the agreement dated 5-5- 1997. In support of claim No.2, an amount of Rs.86,705-55 which is alleged to have been paid in excess has also been claimed. In support of claim No.3, it is stated that an amount of Rs.66,333-93 was recoverable from the defendant. In support of claim No.4 it is stated that defendant was liable to interest @ 18% per annum on the 8 amount of 5% rebate. As the payment was made from time to time to the defendant and the amount was paid in excess to the defendant on which an amount of Rs.10,43,489.30 comes towards interest. It is further stated that since the defendant deposited a sum of Rs.3,70,000/- towards security after adjusting interest an amount of Rs.6,73489-3- has been recoverable. It is further stated that a notice was given to the defendant calling upon him to pay an amount of Rs.16,84,871/- along with interest @ 18% within 15 days of receipt of the notice and the copy of the same has been got exhibited as Ex.PW1/5. Postal receipt is Ex.PW1/6 to PW1/8. Thus, it is stated that after considering claim No.1 amounting to Rs.8,96,041.22 and claim No.2 amounting to Rs.86,705.55 plus claim No.3 Rs.66,339-92 and claim No.4 amounting to Rs.6,73,489-30, a sum of Rs.17,22,576-99 has been due from the defendant. It is further stated that he was liable to pay future interest at the rate of 18%. He has also got exhibited the photo copy of tendered documents as Ex.PW1/1. Final bill has been got exhibited as Ex.PW1/2 (28 in numbers).
8. In defence the testimony of Shri J.K. Sahni, proprietor of 9 M/S.J.K. Construction company who has been examined as plaintiff in Suit No.215/2003 is taken up in defence. He has stated in his testimony that he offered to construct flats as per notice inviting tender. He also offered a rebate of 5% along with the rates. He has further stated that after receipt of tender, he was called for negotiations and clarifications on 7-2-1997, 6-3-1997 and 17-3-1997. It is further stated that the letter of award of work dated 29-3-1997 was issued to him. Rebate as offered was not accepted by the department in terms of the provisions in the tender document itself. In the letter of award of work the amount set out was the net amount payable for work. He has stated that he commenced execution of the work and was paid running account bills up to February, 1999 as the quantum of work originally envisaged stood reduced from the advertised number of flats. No issue of rebate ever arose, as it was not the part of the contract. Letter of dated 17-9-2002 was not in terms of the contract/agreement/letter of award of work and the terms & conditions governing the contract. It is further stated that all communications thereafter relating to 5% rebate are not as per contract between the 10 parties. The final bill payments not paid for are also a violation of the contract. Non settlement of rates even seven years after the placement of the contract was a breach of contract. It is stated that plaintiff has violated the award of work.
9. The question that arises is whether 5% rebate which has been offered by the defendant was a part of the agreement or not. For this, the testimony of both these witnesses along with the tendered documents had to be analysed. Firstly a look has to be made to the agreement which has been executed by both the parties. The same is Ex.D-3. The relevant part of the agreement reads as ''that the terms and conditions contained in the tendered form and conditions of contract to this deed and also the letter of acceptance dated 29-3-1997 shall be binding between the parties''. From this agreement, it is evident that the terms and conditions contained in ''A'' tendered form, ''B'' conditions of contract to this deed ''C'' letter of acceptance dated 29-3- 1997 has been got exhibited as Ex.D-4. The relevant portion of this acceptance letter states ''your letter dated 7-2-1997, 6-3-1997 and 17-3-1997 shall also form part of the 11 agreement''. It means that in addition to the above, A,B and C the letters written by defendant company of dated 7-2- 197, 6-3-1997 and 17-3-1997 have also made part of the agreement. Though these three letters has been made part of the agreement, but if these three letters of dated 17-2- 1997, 6-3-1997 and 17-3-1997 are looked into, they do not relate with regard to 5% rebate which has been offered, they did not have any bearing of the rebate of 5%. With regard to letter of acceptance dated 29-3-1997 which is Ex.PW1/4, this is merely letter of acceptance, therefore, this also does not effect the question to be answered. Thus, only the terms and conditions contained in ''A tender form and conditions of contract have to be looked into. Tender form and conditions of contract is Ex. D-8 (Ex.PW1/D-1). This tendered documents/contract runs from page 1 to 174. The relevant portion with regard to the rebate has been at page 172 on document Ex. D-10. On page 172, 5% rebate has been quoted by the defendant company. The relevant portion reads as under:-
B.F. The general rebate of 5% on tendered amount, 12 Sd/- for J.K. Construction company, proprietor.
10. It has been argued on behalf of the defendant that under the rebate condition, the plaintiff was prohibited from accepting the conditional tenders. The thrust of the arguments is that though they have quoted the rebate of 5%, but it was a conditional tender. On the other hand Ld. counsel for the plaintiff has argued that the rebate which was quoted by the defendant cannot be said to be making tender documents as a conditional one. To ascertain this, a look has to be made to rebate conditions appended with the tender notice. The rebate conditions appended with the tender notice reads as under:-
''it may please be carefully noted that no conditions whatsoever (beyond the tender documents placed below) shall be accepted by the department and the contractors are strictly prohibited from giving conditional tenders. If any contractor is not prepared to execute the work at the terms and conditions contained in the tender documents, he is 13 requested not to tender for this work. It may be noted that if any contractor chooses to submit conditional tender inspite of clear directions given above, his tender shall be liable to be rejected summarily and his full earnest money shall stand forfeited. He will also be liable for being debarred from tender in DDA for a period of six months''.
11. From the reading of this, it comes out that on the one hand department is directed not to accept the condition beyond the tender documents and on the other hand the contractors have been prohibited giving conditional tenders. This rebate condition only prohibits a contractor from giving conditional tenders. It has to be seen whether the rebate of 5% which has been offered by the defendant has to be termed as a conditional tender or not. When the defendant has offered a rebate of 5%, this rebate is only a concession and it cannot be said that it is a condition which has been put on the department for accepting his tender.
This concession on the other hand works out in accepting the tender of the defendant by the plaintiff company. Therefore, it cannot be said that this rebate works out as a condition which can be termed as a conditional tender. 14 Thus, it cannot be said that the tender given by the defendant is a conditional tender. On the other hand it is a sort of concession given to the plaintiff company to accept the tender of the defendant.
12. The next question that arises is whether it is a part of the agreement or not. If a look is made to the cross examination of Shri J.K. Sahni, PW-1 in suit No.215, he has admitted that page No.172 is a part of the tender document. He has admitted that page No.172 bears his signatures. This fact has also been admitted by Shri S.K. Gautam, PW1 in suit No.215. Not only this, this witness PW-1 Shri S.K. Gautam has admitted that agreement was executed between the parties on 9-5-2007. If a look is made to this tender document Ex. D-8, it is noticed that some of the clauses have been scored of which have not been agreed between the parties. Even certain additional clauses have been added to the printed contract form. On blank pages a line has been put. Coming to the page No.172 of the contract Ex.D-10, though line has been put but this rebate clause has not been scored of as has been done in the other clauses of the agreement. It means that the parties have not intended 15 to score of this 5% rebate. Even other wise also the fact that the defendant had offered a 5% rebate on the tendered amount, the plaintiff would not like to refuse the concession. Thus, from the evidence on record that 5% rebate offered by the defendant was not a part of the agreement cannot be accepted. On the contrary 5% rebate offered by defendant was a part and parcel of the agreement. Therefore, this issue is accepted in favour of the plaintiff and against the defendant.
ISSUE NO.2.
13. The onus to prove this issue lies upon the plaintiff. In support of this, it has examined Shri S.K. Gautam, PW-1. The relevant portion of his testimony is taken up. He has stated that the defendant raised 28 bills from time to time, copy of the final bill is Ex.PW1/4. He has further deposed that 5% rebate which was offered by the defendant was not recovered inadvertently from his running bill. When the mistake was detected it wrote a letter dated 17-7-2002 and 28-12-2002 asking the defendant to pay the rebate amount of 5% which was offered by it and it could not be recovered inadvertently. He has got exhibited the copy of the letter 16 dated 17-7-2002 and 28-12-2002 as Ex.PW1/3 and PW1/4. He has also stated that plaintiff served upon the defendant a notice of demand dated 15-9-2004 thereafter calling upon the defendant to pay Rs.16,84,671/- along with interest at the rate of 18% within 15 days of receipt of notice. Copy of the notice has been got exhibited as Ex.PW1/5 and postal receipts from Ex.PW1/6 to PW1/8. He has further deposed that defendant sent a reply dated 21-9-2004 through his counsel, but he has failed to pay the amount to the plaintiff.
14. It has been argued on behalf of the defendant that the suit has not been filed within the period of limitation as the plaintiff was required to file the suit within three years when the work was done. To strengthen his argument, he has stated that the contract was accepted on 29-3-2007 and the work was completed by 10-7-200. The suit was filed on 9- 11-2004. Thus, his plea is that when the work has been completed on 10-7-2000, the suit has been filed on 9-11- 2004 and the case falls under item No.18 part 2 of schedule of Limitation Act under Section 3 of the Limitation Act. 17
15. On the other hand Ld. counsel for the plaintiff has stated that the case of the plaintiff does not fall under item No.18 Part 2 of the schedule ''as the contract was not for the price of work done''. As the plaintiff has not filed the suit for price of work done by it, but it is the defendant who has done the work for the plaintiff. Thus, they have stated that their suit does not fall under item No.18 but it falls under the residuary clause i.e. Item No.113 which makes the period of limitation of three years when the right to sue accrues. To appreciate the arguments of the Ld. counsel for the parties, it would be relevant to extract item No.18 of the schedule as well as item No.113.
PART X-SUITS FOR WHICH THERE IS NO PRESCRIBED PERIOD.
113.Any suit for which no period Three years When the right to sue accrues.
of limitation is provided else-
where in this Schedule.
PART 1 - APPLICATIONS IN SPECIFIED CASES
18.For the price of work done Three years. When the work
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by the plaintiff for the is done.
defendant at his request,
where no time has been
fixed for payment.
16. From the opening word of item No.18, it is noticed that the suit must be filed by the plaintiff for the price of work done by him for the defendant. It means that it is the plaintiff who has done the work for the defendant. In the present case plaintiff ''DDA'' has not done the work for the defendant, but it is the defendant who has done the work for the plaintiff. It means that the period of limitation under this item would have been applicable if defendant ''J.K. Sahni'' who has done the work for the plaintiff ''DDA'' would have filed the suit against it. Therefore, the period of limitation under item No.18 cannot be said to be applicable in the present case. Since the period of limitation does not fall in any other item, a recourse has to be taken to item No.113, which is to the effect that where no period has been prescribed for the suit, three years period of limitation applies from the date when the right to sue accrues. 19 Therefore, it has to be seen to when the right to sue has accrued in favour of the plaintiff and against the defendant for recovery of the suit amount.
17. To ascertain this, a look has to be made to the testimony of Shri S.K. Gupta, PW-1. He has stated in his testimony that the defendant offered a rebate of 5% on the quoted rate but inadvertently the same could not be recovered from the running bills from time to time. He has got exhibited the copy of the final bill as Ex.PW1/2 which is the 28 bill. He has further deposed that when the mistake was deducted the plaintiff vide letters dated 7-7-2002 and 28-12-2002 asked the defendant to pay the rebate of 5% which was offered by it. He has got exhibited the letters Ex.PW1/3 and PW1/4. He has also got exhibited the legal notice making a demand on 15-9- 2004 calling the defendant to pay a sum of Rs.16,84,604/- along with the interest at the rate of 18%, copy of the said notice is Ex.PW1/2 and postal receipts Ex.PW1/6 to PW1/8. However, when he has been cross examined, he has admitted that the amount has been paid to the contractor under 27 running bills and 28 was the final 20 bill. He has further admitted that running bills have been paid for a period when the contract was under execution. He has further admitted that no deduction of 5% has been made from any of the running bills. He has further admitted that running bills submitted by the contractor have been checked by the department before payment. He has also further stated that all statutory levies were deducted. Further 5% rebate was not deducted by mistake. From this cross examination, it comes out that no deduction has been made on account of 5% rebate from all the running bills up to 27 bills inspite of statutory deductions being made. Neither in his cross examination nor in the examination in chief he has stated as to when the mistake was detected. From Ex.PW1/3which is a letter written by the department on 17-2-2002 it has been stated that while awarding the work on 29-3-2007 rebate of 5% could not be accounted for inadvertently. From this, it comes out that rebate of 5% has not been accounted for when the work has been awarded on 29-3- 1997. From Ex.PW1/2 which is the 28 final bills, it is evident that the work was awarded on 29-3-1997, and it 21 completed on 10-7-2000. Thus, from the evidence on record, it comes out that the right to sue accrued on 29-3- 1997, when the work was awarded and in the absence of no specific date as to when mistake was detected, the period of limitation must be counted from 29-3-1997. The suit has been filed on 9-11-2004 i.e. after a period of about seven years. The work has completed on 10-7- 2000. Even if this date is taken, even then the suit is beyond the period of limitation. Thus, from the testimony of this witness, it is evident that the suit of the plaintiff is not within the time. Therefore, this issue is decided against the plaintiff.
ISSUE NO.3.
18. Since the findings on issue No.2 go against the plaintiff, the question of giving any finding on issue No.3 does not arise.
RELIEF.
19. In view of my findings on issue No.2, since the suit of the plaintiff is not within the period of limitation, even if issue No.1 goes in its favour, DDA is not entitled for any relief. Therefore, their suit is dismissed. Decree sheet be 22 prepared accordingly. File be consigned to the Record Room.
ANNOUNCED IN THE OPEN COURT.
DATED;17-7-2007. ( Sukhdev Singh ) Addl. Distt. Judge, Delhi.