Delhi District Court
Rajesh Kumar vs Municipal Corporation Of Delhi on 21 February, 2026
IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 1006/2025
CNR No. DLCT01-013725-2025
DLCT010137252025
RAJESH KUMAR,
Sole Proprietor of M/s Rajesh Kumar-I,
508, VPO-Tikri Kalan,
New Delhi-110094
......Plaintiff
Vs
1. MUNICIPAL CORPORATION OF DELHI
Through: Its Commissioner,
Civic Centre, Minto Road,
New Delhi-110002.
2. The Executive Engineer (M-II) KPZ,
Municipal Corporation of Delhi,
Shakti Nagar Extension,
New Delhi-110052. ...... Defendants
SUIT FOR RECOVERY OF RS. 9,44,344/-
Date of institution of suit : 10.09.2025
Date of hearing of final argument : 17.02.2026
Date of Judgment : 21.02.2026
Digitally
Appearance(s) : Shri Vidya Sagar Sharma Adv. Ld. Counsels for plaintiff.
MUKESH
signed by
MUKESH
KUMAR
Shri Arman Monga, Advocate, Ld. Counsel for the
KUMAR GUPTA
Date:
defendant.
GUPTA 2026.02.21
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CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 1 of 36
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate upon plaintiff's suit for Recovery of Rs.9,44,344/- alongwith interest @ 12% per annum pendentelite as well as future from the date of filing of suit till its realisation. The plaintiff has also prayed for costs of the suit against the defendants.
(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 Rajesh Kumar-I, registered under the GST Act, 2017 and duly registered as a Municipal Contractor with the defendant No.1. The plaintiff firm is engaged in the civil nature of works for defendant No.1 corporation since long.
2.2) The defendant No.1 is a body corporate of the State of Delhi, established and governed under the Municipal Corporation of Delhi Act, 1957. The suit is being filed against the defendant No.1 through its Commissioner who is in-charge of all the acts and day to day activities of the defendant No.1 and defendant No.2 is employee of defendant No.1.
The defendant No.1 is engaged in taking care of all the civil amenities, developments etc. of Delhi and the defendant No.2, Executive Engineer (M-II) KPZone is involved in all the processes of the subject tender since the date of the tender for the works till finalization of the bills on behalf of the defendant No.1 corporation.
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
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2.3) It is further the case of the plaintiff that plaintiff being Government Contractor has approached the defendants for the work through tender invited by the defendant No.2 Executive Engineer (M-II) KP Zone, MCD and afters due process became successful. After satisfaction and completion of required conditions at the stage of pre- work order, the works covered by the tender have been awarded to the plaintiff. Accordingly, the works order No. EE(M-1)KPZ)/SYS/2020- 2021/46 dated 11.09.2020, (in short "WO-46") has been issued to the plaintiff. The plaintiff has also deposited the security/earnest money and entered into an agreement with the defendant No.1 as a pre-condition of the award. The work has been completed by the plaintiff to the satisfaction of the Engineer-in-charge within the stipulated period and the period for defect liability has also passed without any negative remarks with the satisfaction of the defendants.
2.4) The defendants have completed the final measurement of the aforesaid works and bills pertaining to the aforesaid works have been passed and recorded in the measurement books. The details as to when the work was to be started and completed as per the agreement and when the same was started and duly completed by the plaintiff/contractor with respect to the work order number are shown below in a tabulated form:-
Sl. Work DOS DOC DOS DOC
No. Order No. (Agreement) (Agreement) (Actual) (Actual)
1. 46 11.09.2020 10.12.2020 --- ---
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
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2.5) The detail of the composite amount of the passed bill and security amount are given below:-
Sr. No. Work Order Amount of Date of Earnest/Secur No. passed bill passing of ity Amount (first the bills running bill) in Rs.
1. 46 8,62,522/- 30.01.2023 81,822/-
Grand Total of Bill & 9,44,344/-
security deposit
2.6) Despite passing of the bills, the defendants have neither released the aforementioned payment nor apprised the plaintiff of the reasons for withholding the same. The plaintiff has made several requests to the defendants for releasing of the amount of the passed bills as well as the security amount but to no avail. The defendants, on the other hand, have tried to evade the payment on one pretext or the other and as such contravened the clause 9 of the General Terms and conditions of the agreement according to which the defendants are liable to release the same within a period of six/nine months. Consequently, the plaintiff had issued a legal notice dated 19.01.2024 u/S 477/478 of the MCD Act, calling upon the defendants to pay the suit amount with interest @ 12% per annum which was neither complied nor replied to by the defendants.
2.7) The plaintiff has claimed accrual of the cause of action on 11.09.2020 when the defendants have awarded the work order to the plaintiff, when the bills of the plaintiff have been prepared and passed on 30.01.2023 by the defendants, and finally, on issuance of legal notice Digitally dated 19.01.2024 which has not been responded to by the defendants.
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2026.02.21
16:44:08
+0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 4 of 36
Hence the present suit for recovery of Rs.9,44,344/- with pendentelite and future interest @ 12% per annum and costs of the suit.
(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 premature, without any cause of action and therefore, deserves to be rejected at the threshold. The plaintiff has not approached the court with clean hands as the plaintiff has not only concealed the material facts but has also breached the agreement by not complying with the contractual obligations set out in the work orders and the GCC.
3.2) It has also been contended that the plaintiff has filed the present suit seeking, a recovery of a sum of Rs.9,44,344/- towards execution of Civil works alongwith the interest against defendants in respect of Work Orders No.46 dated 11.09.2020, and the defendants has duly scrutinized and upon such scrutiny the net amount assessed as payable to the plaintiff's firm was quantified at Rs.8,52,522/- exclusive of the security deposit amounting to Rs.65,422/- and withheld amount of Rs.10,000/-, however, the plaintiff while filing the present suit has not disclosed that the said amount was never denied by the defendant and its release was subject to compliance of mandatory statutory and contractual requirements. It has further been contended that plaintiff/contractor has not yet submitted certain essential documents which are mandatorily Digitally signed by required for the processing and release of the payments against the said MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:44:14 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 5 of 36 +0530 bills. These documents includes but are not limited to, statutory clearance tax related certificates, no-due/affidavits and other compliance documents as prescribed under the applicable financial rules, contractual terms and audit requirements and unless and until, the plaintiff furnishes these documents and complies with his statutory obligations, the defendant is legally restrained from disbursing the amount. It is also contended that the release of public funds is always subject to strict compliance with the financial proprietory and audit norms and any relaxation would render the officials personally liable under law. Hence the delay in the release of payment is directly attributable to the plaintiff's own failure to furnish the required documents and not to any omission on the part of the defendant. It has further been contended that the plaintiff is liable to be dismissed as the plaintiff/contractor has not adhered to the terms and conditions laid down by the Hon'ble High Court of Delhi guidelines dated 22.03.2018 and it is the mandatory for the plaintiff to submit the final bill alongwith the photographs which the plaintiff has failed to do. It has also been contended that the plaintiff has not complied with the mandatory provisions of the Goods and Services Tax Act, 2017 in as much as no valid invoice, voucher or statutory undertaking has been placed on record to substantiate the said claim. Further, the plaintiff has also failed to disclose a valid cause of action to maintain the present suit.
3.3) On merits, all the allegations made in the plaint have been denied as incorrect. It has been denied that due to the said amounts have not been paid by the defendants to the plaintiff till date, the plaintiff has been put to loss of investment and interest further accrued thereon. It Digitally signed by MUKESH MUKESH KUMAR KUMAR GUPTA Date:
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has been contended that the defendant has not received any notice as alleged in the para under reply, hence the question of reply the same does not arise at all. It has further been denied that the defendants are liable to pay interest @ 12% per annum on entire outstanding amount of Rs.9,44,344/- to the plaintiff.
4. A detailed replication to the Written Statement has also been preferred by the plaintiff reiterating the contents of the plaint and vehemently denying the contents of the Written Statement. It has been reiterated that the defendant No.2 awarded the work order No.46 on 10.09.2020 to the plaintiff on behalf of defendant No.1 and the plaintiff complied the work within stipulated time. Thereafter, the defendant No.2 passed the 1st running bill of Rs.8,62,522/- dated 30.01.023 in as net amount and the plaintiff deposited Security/Earnest money of Rs.81,822/-
in the same bill thus the total comes to Rs.9,44,344/-. It has been reiterated that the defendant's prolonged withholding of payment without justification attracts liability for both pendentlite and future interest upon the interest part that the defendant mentioned clause 9 of GCC in its Written Statement which were already decided/discussed by the Hon'ble High Court of Delhi in various RFA 160/2017 titled as NDMC Vs. Vipin Gupta on 22.03.2018, however, EDMC filed SLP against one of the RFA titled as EDMC & Anr. Vs. Satpal Singh which has already been dismissed by the Hon'ble Court. The plaintiff has reiterated that the suit be decreed with interest and costs.
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2026.02.21
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(D) CRYSTALISING THE DISPUTE :-
5. On the pleadings of the parties and documents placed on record and after hearing Ld. Counsels for the parties, the following issues were framed for adjudication vide order dated 03.12.2025.
ISSUES.
(1) Whether the plaintiff has not submitted the bills for payment as alleged in the preliminary objection of the Written Statement as per the terms and conditions of GCC, particularly Clause 9 of GCC ? OPD.
(2) Whether the plaintiff is entitled to any interest on the principal amount of Rs.8,62,522/- for the period 30.01.2023 till 24.11.2025, if so, at what rate and for what period?OPP.
(3) Whether the plaintiff is entitled to recovery of Security amount of Rs.81,822/- as claimed in the suit? OPP.
(4) Whether the plaintiff is entitled to any interest on such amount of security, if so, at what rate and for what period?OPP.
(5) Relief.
(E) EVIDENCE OF PLAINTIFF.
6. 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 following documents :
Digitally signed1. Copy of Registration Certificate Ex.P-1 MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.02.21 16:44:38 +0530
2. Copy of GST Registration Ex.P-2 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 8 of 36 Certificate
3. Copies of Work Orders Ex.P-3
4. Copy of 1st Running Bill Ex.P-4
5. Copy of General Condition of Ex.P-5 Contract (GCC)
6. Copy of Legal Notice dated Ex.P-6 19.01.2024 alongwith postal (colly) receipts.
7. Original Non-Starter Report Ex.P-7
7. The witness has deposed that the suit of the plaintiff is correct and the same be decreed as prayed for. On enquiry of the court regarding payment of any amount by the defendant during the course of pendency of the suit, the witness has stated that the defendant Corporation has made the payment of principal amount of Rs.8,52,522/- on 24.11.2025 and the remaining amount of Rs.10,000/- as principal amount and Rs.81,822/- as security/earnest amount has withheld. The witness has deposed that since the suit amount was not paid by the defendants, the plaintiff has been put to loss of investment and interest further accrued thereon. It has further been deposed that the suit is correct and the defendants are liable to pay the interest and costs.
8. During a detailed 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, submission of bills in question, payment of GST qua the work order in question and other aspects and Digitally signed by even confronted the witness with the letter sent by the defendant No.1, MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:44:46 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 9 of 36 +0530 which the witness deposed that he has submitted the document which have been asked from him. He has however admitted that he has not submitted the running bill as well as the final bill in the department of MCD. He has deposed that he has not paid the complete GST, however, he has paid the GST qua the amount which he has received. The witness was confronted with letter dated 13.10.2025 Ex.PW1/D-1 to which the witness has admitted its receipt. Similarly, the witness has admitted that he has received the letter dated 02.01.2026 Ex.PW1/D-2 from the defendant also admitting that he has not submitted the document as mentioned in the letter. He has also admitted that he has not placed any document as asked in the abovesaid letter in the judicial record. He has denied the suggestion that he has not submitted the running/final bills and another relevant documents till date. The witness has denied the suggestion that the present suit is liable to be dismissed.
9. No other witness was examined by the plaintiff and the evidence of the plaintiff was closed on 21.01.2026.
(F) DEFENDANT'S EVIDENCE :-
10. The defendants in their defence got examined one Shri Anurag Kankerwal, Assistant Engineer (M-11), Keshavpuram Zone, Municipal Corporation of Delhi who reiterated the contents of the Written Statement on oath. DW1 also deposed in his evidence that the work order was given to the plaintiff by defendant No.1 corporation. The witness has further deposed that the 1st and running bills against the work order has Digitally signed by MUKESH been scrutinized and net amount assessed as payable to the plaintiff firm MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:44:53 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 10 of 36 +0530 was quantified at Rs.8,52,522/- exclusive of the security deposit amounting to Rs.65,422/- and withheld amount of Rs.10,000/- and the plaintiff while filing the present suit has not disclosed that the said amount was never denied by the defendant but its release was always subject to the compliance of mandatory statutory and contractual requirements. DW1 has further deposed that plaintiff/contractor has not yet submitted certain essential documents which are mandatorily required for the processing and release of the payment against the said bills and release of public funds is always subject to strict compliance with the financial propriety and audit norms. The witness has further deposed that defendant has duly prepared and passed the admitted measurements/amounts under the said bills in terms of clause 9 of the GCC, and the plaintiff has failed to discharge his obligation of submitting the final bills in the prescribed format. He has further deposed that as per prevailing policy, there is no delay in payment of the security amount on the part of defendants and since the plaintiff has failed to comply with clause 45 of the GCC, the contractor/plaintiff is not entitled for the security deposit.
11. The witness was subjected to a detailed cross-examination by Ld. Counsel for the plaintiff who has tried to puncture the testimony of witness also on the point of submission of running & final bills, preparation, passing of bills and release of payment. The witness has deposed that the plaintiff has not complied with the terms of NIT and the bills have been prepared and passed by the department on the basis of Digitally signed by measurement book. He has deposed that the terms of submitting the MUKESH MUKESH KUMAR KUMAR GUPTA Date:
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running and final bills have not been fulfilled by the plaintiff. He has admitted that JE has written at page No. 34 of the Measurement book Ex.DW1/PX-1 that the site is clear. When confronted with the page No.25 of the Measurement book Ex.DW1/PX-2 where it is written that Work is done as per satisfaction and NIT conditions to which the witness has replied in affirmative. He has also admitted that JE has made entry in the Measurement Book when all the work have been completed by the contractor at site. He has deposed that there is no labour complaint before the department regarding the work in question. When the witness has confronted with the page No.35 of the Measurement Book Ex.DW1/PX-3 and asked whether the signature appending on it is of him to which the witness has replied in negative. Similarly, the witnesses on confronted at page No.26 Ex.DW1/PX-4 regarding mentioning of Material got tested in MPL to which the witness has replied that the same has been written by the then JE after passing the material quality. The witness has admitted that the withheld principal amount is Rs.10,000/- and the security amount is Rs.81,822/- He has denied the suggestion that the plaintiff is entitled to the interest due to delay payment made by the department as per clause 9 of GCC.
12. No other witness was examined by the defendants and the evidence of the defendants was closed vide statement dated 28.01.2026.
(G) ARGUMENTS ADDRESSED:-
ARGUMENTS OF PLAINTIFF.
Digitally
signed by
MUKESH
13. Ld. counsel for the plaintiff Shri Vidya Sagar Sharma appearing MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:45:22 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 12 of 36 +0530 on behalf of plaintiff has vehemently argued that the plaintiff has successfully executed the awarded Work Order No.46 dated 11.09.2020 within time and to the satisfaction of the defendants in compliance of the terms and conditions of the GCC and deposits. Despite passing of the bill in respect of aforesaid Work Order on 30.01.2023, the defendant has unreasonably withheld the legitimate payment of the plaintiff, which has finally been released on 24.11.2025, after the plaintiff has raised the grievance by way of present suit. It has further been sought to be argued that the aforesaid action of the defendants is unreasonable and equity demands that the defendants should at least pay a reasonable interest on amount for the period of delay in making the payment to the plaintiff. He has vehemently relied upon the pronouncement of law laid down in North Delhi Municipal Corporation Vs. Vipin Gupta, RFA 160/2017 & CM APPL.5807/2017 and Rajneesh Yadav Proprietor of M/s Bharat Construction Co. Vs. The North Delhi Municipal Corporation, 2023/DHC/000174 to buttress his point that even the interest was awarded by Hon'ble High Court on the principal amount as well as security amount while laying down the comprehensive guidelines. In respect of the stand taken by the defendants that as per clause 9 of GCC the payment shall be paid subject to the availability of funds under the particular Head, Ld. Counsel has relied upon North Delhi Municipal Corporation Vs. M/s Barahi Construction, RFA (Comm.) 6/2021 & CM APPLs. 10185-10188/2021, wherein a Division Bench of the Hon'ble High Court has upheld the directions/guidelines laid down in the judgment of Vipin Gupta (supra). It has been stated that Digitally MUKESH signed by MUKESH KUMAR Hon'ble High Court has taken cognizance to the fact that clause 9 of KUMAR GUPTA GUPTA Date:
2026.02.21 16:45:29 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 13 of 36 GCC ought not to be interpreted in such a way causing delay in availability of funds and the MCD is required to create an appropriate portal reflecting the amount available and the way its payment has been made. It has further been argued that once such facility is available, MCD could have justified the non-availability of funds and ensure that payments are directly paid in queue basis. It has also been argued that even the defendants have failed to show on record by way of any clear and cogent evidence the fact that the funds were in fact not available under the particular head which the defendants were required to make to the plaintiff despite passing of bills.
14. On the aspect of interest on security amount, Ld. Counsel for plaintiff has argued that admittedly bills were passed and the payment were prepared and was released by the defendants at a later stage ipso facto show that no labour complaint was either been lodged or pending against the plaintiff. He has relied upon the judgment of Rajneesh Yadav (supra) in support of his case and claimed that interest on security deposit be also granted to the plaintiff.
ARGUMENTS OF DEFENDANT:
15. Ld. Counsel for defendants, Mr. Arman Monga, on the other hand has vehemently contested the arguments addressed by the plaintiff and thereby argued that the payment of Rs.8,52,522/- in respect of passing bills has already been made on 24.11.2025 towards the principal amount and the remaining withholding amount of Rs.10,000/- and security Digitally signed by MUKESH amount of Rs.81,822/- shall be paid as the same has already been MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:45:36 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 14 of 36 +0530 processed and the plaintiff has never submitted the final bills in the present case which he has admitted in the cross-examination. He has further argued that even otherwise, payments are required to be made by the defendants in terms of clause 9 of GCC which specifically provides that the bill passed shall be paid depending upon the availability of funds in the particular head of account from time to time and the same shall be made strictly on queue basis i.e. first the past liabilities will be cleared and after that the release of payment for passed bill will be in order of demand receive at HQ under particular head of account. Ld. Counsel while relying upon the aforesaid clause has emphasized that no interest shall be payable to the contractor in case of delay in making payment of the bills on account of non-availability of funds in a particular head of MCD which otherwise provides that the period for which payment is required to be made shall be 6 or 9 months depending upon the tenders value being 5 lakhs or above respectively and the plaintiff being well aware of the terms and conditions of GCC is not entitled to any interest on principal amount. Ld. Counsel for defendants has vehemently argued that the security amount has been withheld as the plaintiff has failed to file the Labour Clearance Certificate in terms of clause 45 of GCC and as such, he is not entitled to either security or any interest on security amount. Ld. Counsel for defendants has finally prayed for dismissal of the suit with exemplary costs.
(H) ANALYSIS & DETERMINATION:-
16. I have heard the arguments addressed by the Ld. Counsels for the Digitally signed by parties, perused the entire record including the oral and documentary MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 15 of 36 16:45:45 +0530 evidence. I have given a thoughtful consideration to the same. My issue- wise determination is as under:-
Issue No.1: Whether the plaintiff has not submitted the bills for payment as alleged in the preliminary objection of the Written Statement as per the terms and conditions of GCC, particularly Clause 9 of GCC ? OPD.
17. The onus of proving this issue was also held upon the defendants.
This issue arises on the basis of preliminary objections raised by the defendants in their Written Statement that plaintiff has not submitted either the first running bill or final bills with respect to the work order, and as such, the plaintiff has failed to fulfill his contractual obligations, leaving absence of cause of action to maintain the suit. 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) setting out the relevant terms and conditions to make it clear that the General Conditions of Contract and Special Conditions of Contract shall be applicable to the work order. The plaintiff was awarded work by way of Work Orders No.46 dated 11.09.2020 in which agreements and the General Conditions of Contract (GCC) were executed by which a contractor is required to present and submit bills (both the interim and the final) to the defendants for payment and the plaintiff has failed to submit any bill which he was necessarily required to do in compliance of clause 7 and 9 of GCC.
18. On the other hand, it is the contention of the plaintiff that the question of submission of interim or final bills does not arise as the bill Digitally signed Ex.P-4 has already been passed by the defendants on the basis of by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
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Measurement Book and after due scrutiny. It has also been contended that even in the cross-examination of DW1, the witness has admitted that the plaintiff has fulfilled some conditions during the executon of the work as per the NIT specification and the defendants have prepared and passed the bill on the basis of measurement book and have also released the payment on the basis of bill so prepared and passed by the defendant No.1 department. Hence, the present suit contains a valid cause of action.
19. Analysing the same at the outset, in legal terms, a cause of action can be described as:
"The cause of action means a bundle of material facts which it is necessary for the plaintiff to prove in order to get relief in the suit. [2024] 5 S.C.R. 404: 2024 INSC 333 Arcadia Shipping Ltd. V. Tata Steel Limited and Others."
Further for ascertaining the existence of a Cause of Action, the plaint must be considered alongside its relied documents to determine whether it discloses a valid cause of action or not. (Gurmeet Singh Sachdeva Vs. Skyways Air Services (P) Ltd. 2025 SCC OnLine Del 3017).
20. Thus, to decide the instant issue, the court will have to examine whether these bundle of facts are in fact missing so as to non-suit the plaintiff in the light of contentions raised. It may be seen that the work is completed to the satisfaction of the defendants and the bill Ex.P-4 has been passed by the defendants on 30.01.2023 on the basis of Digitally signed by measurement book. The defendants have even released the amount of MUKESH MUKESH KUMAR KUMAR GUPTA Date:
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Rs.8,52,522/- on 24.11.2025 in favour of the plaintiff by withholding security amount of Rs.81,822/- and part principal amount of Rs.10,000/- on the ground non-compliance of clause 45 of GCC.
21. Admittedly, the plaintiff has failed to submit either first running bill or final bill with respect to the work order. However, if the cross- examination of DW1 Shri Anurag Kankerwal EE (M-II) is carefully considered, he has not only admitted that the plaintiff has executed the work, passing of the bills Ex.P-4 but has also admitted that defendant No.1 released the payment on the basis of bills prepared and passed by the department. If the bills Ex.P-4 is carefully examined, each bill contains not only the details of work, rates on which the work was completed but also the total amounts against the corresponding work order. The bill has been signed by the concerned Cashier/UDC, the Assistant Account Officer and even the Executive Engineer on behalf of the Commissioner MCD which clearly indicates that these bill has been duly passed by the competent officers of the defendant corporation who are duly authorised not only to verify and check the same but also pass the same. This bill is admittedly based on the measurement book 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 due signatures on the same. It is not the case of the defendants that this bill has been obtained by the contractor through illegitimate means or through back door. It is unfathomable for the court to understand as to MUKESH by MUKESH how the defendant corporation will reach this stage of preparation, cross-
Digitally signedKUMAR GUPTA KUMAR Date:
GUPTA 2026.02.21 16:46:10 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 18 of 36 verification and passed the bills without the necessary formalities being completed by the plaintiff/contractor. Thus, taken on the yardstick of preponderance of probabilities, Ex.P-4 cannot be merely considered as an internal noting of the department but are documents to which the plaintiff is clearly also a party.
22. It is further not in dispute that this bill was prepared, cross- checked and passed and has been prepared strictly after verification on the basis of the measurement book. DW1 Shri Anurag Kankerwal during cross-examination has admitted that the bill has been passed as per departmental procedure and the defendant has, though, released the principal amount but withheld the security amount on the basis of the aforesaid bill. Thus, taken on the yardstick of preponderance of probabilities, the suit of the plaintiff thus indicates existence of a valid cause of action, though is an admitted fact that plaintiff has failed to submit either the first or final bills. This issue is accordingly decided against the defendants and in favour of the plaintiff.
Issue no.2, 3 and 4.
(2) "Whether the plaintiff is entitled to any interest on the principal amount of Rs.8,62,522/- for the period 30.01.2023 till 24.11.2025, if so, at what rate and for what period?OPP.
(3) "Whether the plaintiff is entitled to recovery of Security amount of Rs.81,822/- as claimed in the suit? OPP.
(4) "Whether the plaintiff is entitled to any interest on such amount, if so, at what rate and for what period? OPP
23. The onus of proving these three issues are held upon the plaintiff Digitally signed by MUKESH and since the defendants have already made the payment of principal MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:46:19 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 19 of 36 amount of Rs.8,52,522/- (sans the withheld amount of Rs.10,000/-), the only question before the Court is the entitlement of the plaintiff to the interest on suit amount from the period it becomes due to the date on which it was released, the withheld amount, the security deposit and the interest thereon, the same is pivotal to the entire controversy. Defendants have raised multiple aspects to controvert the liability which the court shall deal with in seritum while analysing the oral as well as evidence on record.
24. Before deciding the interest aspect, the plaintiff has to prove first his entitlement of the entire bill amount including the amount withheld for which, the plaintiff has examined himself as PW1 with affidavit by way of evidence as Ex.PW1/A. Admittedly, there is no dispute regarding the award of work order Ex.P-3, labour complaint or any other issue regarding the satisfactory work being completed except the delayed completion of work and of non-filing of bills resulting into alleged non- compliance of GCC.
25. The defendants have taken a defence that since the plaintiff has not submitted the bill which he was contractually required to submit, is not entitled to the amount of Work Order and as per specific clauses 7 and 9 of GCC and clause 4 of the work order Ex.P-3, or for any payment, if he does not submit the bill or certificate of completion. It has also been contended that the plaintiff was required to submit final bill within one month of the date of the final certificate of completion furnished by the Digitally signed by MUKESH Engineer-in-charge or within three months of physical completion of the MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:46:27 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 20 of 36 work which he has utterly failed to do.
26. The plaintiff has pressed upon the fact that the defendants had passed the requisite bill Ex.P-3 in respect of the work done, a copy of which has 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 outstanding amount of the bill as claimed and which the defendant No.1 is withholding without any justifiable reason and even passing of the same after due measurement and scrutiny. The plaintiff has also submitted that once the defendants had accepted the execution of the work by the plaintiff as also after submission of the measurement duly entered the same in the Measurement Book and even processed the bills pertaining to the work order without any dispute whatsoever, the defendants were under the liability to pay the contractual work amount to the plaintiff.
27. Before proceeding further, the court deems 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 Digitally be consider due on account of work execution".
signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:46:33 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 21 of 36 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 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 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 event 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 Digitally signed "The final bill shall be submitted by the contractor in the same by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
manner as specified in interim bills within three months of GUPTA 2026.02.21 16:46:39 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 22 of 36 physical completion of the work or within one month of the date of the final certificate of completion furnished by the Engineer- in-charge whichever is earlier. 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."
28. 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 queue basis, and d. the interest shall not be payable by MCD for delayed payment on account of non-availability of funds".
29. Hon'ble High Court of Delhi had the occasion of examining the aforesaid clauses where it has been observed that a corporation which gets the work done to the satisfaction cannot be allowed to include a term Digitally in a contract which is per se unconscionable and unreasonable in so far as signed by MUKESH MUKESH KUMAR KUMAR GUPTA Date:
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16:46:45
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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 reason for delay 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 No.1 corporation.
30. The Hon'ble High Court has gone to the extent of directing that for refund of security deposit and earnest money deposit the contractor is required to 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 entire process to avoid litigation between the corporation and the contractors executing the work.
31. Applying the aforesaid to the present case, it is not in dispute that work awarded through WO No.46 Ex.P-3 was duly executed by the plaintiff with precondition earnest money and security deposit being deposited. It is also not in dispute that the plaintiff has completed the Digitally signed by MUKESH work leading to preparation of the bills passed the Executive Engineer MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 24 of 36 16:46:52 +0530 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 No.1 corporation. There are three technical aspects, which have raised by the defendants, one is that the plaintiff has not completed the work within the stipulated time, not filing the Labour Clearance Certificate and the non-filing of running or final bills by the plaintiff.
32. The defendants have taken first technical objection that no bills were ever submitted by plaintiff for clearance to the defendant corporation. However, if the cross-examination of DW1 Shri Anurag Kankerwal EE (M-II) is considered, he has not only admitted that the JE has made entry in the Measurement Book when all the work have been completed by the contractor at site but has also admitted that there is no labour complaint pending on record. He has also admitted that the defendant No.1 has withheld principal amount of Rs.10,000/- and the security amount of Rs.81,822/-. He has further admitted that JE has written at page No. 34 of the Measurement Book Ex.DW1/PX-1 that the site is clear. Similarly, the witness has admitted that the concerned JE has written the Statement "Work is done as per satisfaction and NIT conditions" at page No. 25 Ex.DW1/PX-1. The witness has also admitted the signature of AE on Ex.DW1/PSX-3 and the material got tested MPL Lab has been written by the concerned JE at page No.26 Ex/DW1/PX-4. The witness has further admitted that he has knowledge about clause 9 of GCC according to which there is period for 6 months for the amount below Rs.5 lakhs and 9 months for the amount above Rs.5 lakhs for Digitally signed by MUKESH making the payment. If the bill Ex.P-3 is carefully examined and as MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:47:02 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 25 of 36 +0530 already discussed the bill contain not only the details of work, rates on which the work was completed but also the total amounts against work order. The bill has been signed by the concerned Cashier/UDC, the Assistant Account Officer and even the Executive Engineer on behalf of the Commissioner MCD which clearly indicates that this bill has been duly passed by the competent officers of the defendant corporation who are duly authorised not only to verify and check the same but also pass the same. This bill is admittedly based on the measurement book 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 due signatures on the same. It is further not in dispute that this bill was prepared, cross-checked and passed and has been prepared strictly after verification on the basis of the measurement book. As per departmental procedure, the running bill has been passed on 30.01.2023 as per the deposition of PW1. 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.P-3 but is deliberately denying the claim of the plaintiff on the technical plea of non-submission of bills. 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 defendants have admittedly failed to show any document on record showing failure Digitally signed by MUKESH of compliance or guidelines at the end of the plaintiff.
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2026.02.21
16:47:09
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33. As already discussed the Clauses 4, 7 and 9 of the GCC are the relevant clauses which are applicable to the court and has been a subject matter of discussion before the Hon'ble High Court of Delhi in Sanjeev Kumar's(supra) case where the Hon'ble High Court has held that the Engineer-in-chief or the concerned Engineer is required to certify the payments in respect of the amounts of the work done by the Contractors and the payments are to be made by the Defendant Corporation in respect of the passed bills subject to availability of the fund with a caveat that the same shall be made on queue basis as per the specified period of 6/9 months as the case may be beyond which interest shall be payable by the MCD for the delayed period.
34. According to the plaintiff, bill Ex.P-3 for Rs.8,62,522/- and security amount of Rs.81,822/- has been deposited as pre-condition and compliance of the tender document and the defendant has released the amount of Rs.8,52,522/-by withholding the amount of Rs.10,000/- and the security amount of Rs.81,822/-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.
35. The claim of the defendants regarding non-compliance of contractual obligations and failure to submit the final bill as required under clause 7 and clause 9 of GCC and clause 4 of the work order besides compliance of clause 17 and 45 of GCC for refund of the security deposit has Digitally already been discussed in detail in the light of the judgment of Hon'ble signed by MUKESH MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 16:47:16 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 27 of 36 High Court of Delhi in North Delhi Municipal Corporation Vs. Sanjeev Kumar (RFA 430/2016) has already been duly shown by the plaintiff to rebut the claim for refund of the security deposit being pre-mature and untenable.
36. As already held in the foregoing paras, admittedly the plaintiff had completed the works awarded to him pursuant to work order Ex.PW1/3 and there is no Hindrance Register maintain regarding the delay of the work as mentioned in the Measurement Book Ex.DW1/PX-1 (colly) as deposed by DW1 in his cross-examination, and even the bill has been prepared, verified and passed by the defendant corporation on 30.01.2023. The defendants have admitted its liability by preparing and passing of the bills Ex.P-3 which was counter signed by the plaintiff in token of its correctness.
37. As regards the amount of Rs.10,000/- withheld by the defendants in the bills Ex.P-3, DW-1 Shri Anurag Kankerwal in his cross examination has admitted that this amount was withheld qua the work order No.46. The work has been satisfactorily completed and defect liability period has also expired and there is no complaint qua the work done by the plaintiff. The bills in question Ex.P-3 covering the amount of work done have admittedly been prepared by the defendants. The plaintiff on his part has issued a legal notice under Section 477 & 478 of DMC Act, dated 19.01.2024 Ex.P-6 (colly), the receipt of which has not been disputed or denied by the defendants in their affidavit of Admission Digitally signed by MUKESH Denial of documents but have merely mentioned that GCC was not MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 28 of 36 16:47:22 +0530 complied with and the plaintiff has not completed certain formalities which is required under GCC. Admittedly, no complaint regarding quality of work done by the plaintiff nor any labour dispute with respect to the aforesaid work. As such there is no reason to withhold the aforesaid amount by the defendant. Therefore the plaintiff is entitled to the recover the aforesaid withheld amount of Rs.10,000/-.
38. In so far as the refund of the security deposit of Rs.81,822/- against the work order is concerned, PW-1 Shri Rajesh Kumar, the plaintiff has categorically deposed that the same was not refunded despite satisfactory completion of the work covered under work order Ex.P-3. The only objection is non-compliance of clause 17 & 45 of GCC. The defendant, DW1 during his cross-examination has admitted that plaintiff has not complied with the terms of NIT and the bills have been prepared and passed by the department on the basis of mesurmeent book and the terms of submitting the running and final bills have not been fulfilled by the plaintiff and the security amount has not been refunded to the plaintiff till date. It has also been admitted that the defendant No.1 department has withheld the principal amount of Rs.10,000/- and the security amount of Rs.81,822/- and now th site is clear. Witness has also admitted that there is no labour complaint on record.
39. 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 Digitally signed by MUKESH MUKESH KUMAR has been prepared and passed, whichever is later. Clause 45 of the GCC KUMAR GUPTA GUPTA Date:
2026.02.21 16:47:29 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 29 of 36 +0530 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.
40. Thus, the works were completed by the plaintiff and the bills were prepared and passed by the defendants on 30.01.2023. 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.P-3. As per the Meaurement Book, DW-1 Shri Anurag Kankerwal has also admitted in his cross examination that there are no labour complaints in respect of the work order Ex.P-3. 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 the aforesaid discussion, the plaintiff has been successful in discharging the onus for his entitlement to the withheld amount of Rs.10,000/- towards 1st RA bill and security deposit amount of Rs.81,822/-.
41. In so far as the interest aspect is concerned, The onus to prove the same is also upon the plaintiff who has claimed pendentelite and future interest @ 12% per annum on the outstanding amount of Rs.8,62,522/-
Digitally MUKESH signed by MUKESH KUMAR from the date of filing of the suit till its realization.
KUMAR GUPTA
GUPTA Date:
2026.02.21
16:47:35
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42. Ld. Counsel for the plaintiff has argued that defendants have illegally withheld the amount of bills as the plaintiff has successfully executed the awarded work. The defendants have not only passed the bills Ex.P-3 but also released the part outstanding amount of the bill in respect of the W.O. No. 46 leaving the balance of Rs.91,822/- (withheld principal amount of Rs.81,822/- and Rs.10,000/- as security amount). It has further been argued that the plaintiff has suffered financial losses as defendants have 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.
43. Per Contra, Ld. Counsel for the defendants has maintained that plaintiff is claiming the decreetal amount without submitting the bills and the requisite documents including labour certificate and complying with terms and conditions of GCC. It has been the case of the defendants that as per clause 7 of GCC, submission of interim or final bills are necessary and in terms of clause 9 of GCC, payment of passed bills shall depend upon the availability of funds in the particular head of the account from time to time and the same shall be made strictly on queue basis therefore, no interest shall be payable to the plaintiff in case of delay in payment. Further, the plaintiff has failed to file the Labour Clearance Certificate in terms of clause 45 of GCC and as such, he is not entitled to any interest on security amount.
44. According to the plaintiff, he has duly complied with the terms & Digitally signed by MUKESH conditions of GCC and it was only then 1st running bill was passed by the MUKESH KUMAR KUMAR GUPTA GUPTA Date:
2026.02.21 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 31 of 36 16:47:43 +0530 defendants on 30.01.2023 for Rs.8,62,522/- alongwith earnest money of Rs.81,822/- qua WO 46 Ex.P-3. Ld. Counsel for the plaintiff has argued that the plaintiff is not only entitled to the interest on principal amount but also on the security deposit as defendants have illegally and unreasonably withheld the same. According to plaintiff, the defendants have paid the part principal amount of Rs.8,52,522/- on 24.11.2025 leaving the balance of Rs.91,822/- which includes the security deposit of Rs.81,822/- and have failed to release within the stipulated period as required under clause 9, 17 and 45 of GCC due to which the plaintiff has suffered financial losses and investment and hence, the plaintiff is entitled for the interest on the delayed payment.
45. The clause 7 of the GCC specifically provides that for works estimated to cost over Rs.20,000/-, the interim 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 the Engineer-in-Charge and if the contractor fails to comply with the same, he shall not be entitled to any claim of interest payable to the contract. As already discussed and in view of judgment of our own Hon'ble High Court in North Delhi Municipal Corporation & Anr. Vs. Sanjeev Kumar (supra) and in view of repeated circular issued by defendant No.1 from time to time, the contractor/plaintiff is under a mandatory contractual obligation to submit the interim bills as well as the final bill. It is clear from the aforesaid clauses of contract that interest Digitally signed by MUKESH shall accrue only after the plaintiff submits the bills to the defendants, MUKESH KUMAR KUMAR GUPTA Date:
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however, as already discussed, the plaintiff has admittedly not submitted either the running or the final bill. The defendant DW1 has even deposed in his cross-examination that the plaintiff has not submitted any running bills or the final bill. As discussed earlier, under GCC, the contractor is mandatorily required to submit its own running/final bill and preparation and passing of any bills suo motu by the defendants is an internal act of the defendants that cannot substitute or obviate the contractual need of filing the bills by the contractor/plaintiff even if the same has been accepted by the plaintiff by signing upon it. Therefore, no right to claim any interest accrues in favour of the plaintiff. As such, the plaintiff is not in a position to claim any pre-suit interest as well as any pendentelite and future interest on the withheld amount of Rs.10,000/- .
46. However, the plea of the defendants that plaintiff is also not entitled to the interest on the security deposit holds no ground just because Clause 45 of the GCC also provides that security deposit of the work will not be refunded till the contractor produces a Labour Clearance Certificate from the Labour Office. The clause also includes provision for "deemed clearance" if no complaint is pending on record within 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. Clause 17 of GCC further provides that in case the tendered value of work is more than Rs. 5 lakhs, the security amount shall not be refunded before the expiry of 9 months after the issue of the certificate, final or otherwise, of completion of work or till the final bill MUKESH by Digitally signed MUKESH has been prepared and passed, whichever is later. Admittedly, the KUMAR GUPTA KUMAR Date:
2026.02.21 GUPTA 16:48:02 +0530 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 33 of 36 awarded works have been duly completed by the plaintiff and the defendants have failed to produce any cogent evidence on record to show that any labour complaint or communication has been received within the stipulated period. Further, the bill Ex. P-3 has been passed on 30.01.2023 and the tendered amount of the bills are, evidently, more than Rs.5 lakhs, therefore, the maximum period for which the security amount could have been withheld by the defendant No.1 corporation is 9 months beyond which the plaintiff is entitled to interest on security deposit .
Reliance placed on Rajneesh Yadav Proprietor of M/s Bharat Construction Co. Vs. The North Delhi Municipal Corporation, 2023/DHC/000174. Though, Ld. Counsel for plaintiff has argued that the work was completed on 10.12.2020. On the contrary, DW1 during his cross-examination has duly shown that the measurement book in respect of work has been completed on the date 17.04.2023, the plaintiff is entitled to the interest on the security amount from the aforesaid date only. Ld. Counsel for defendants has brought measurement book on record in which at page No.35 ExDW1/PX-3, it has been mentioned that site is clear that all the material are as per the specification and satisfactory", therefore, the work is completed by the plaintiff 17.04.2023. Further, it has also been mentioned in the Measurement Book that there is no labour complaint. The plaintiff has thus failed to bring any document in its evidence to prove specifically that the work has been completed on 10.12.2020 and in absence of any certificate specifically disclosing that the work was completed on 10.12.2020, the plaintiff is entitled to the interest on security amount from 17.04.2023. Digitally signed by MUKESH Accordingly, the plaintiff is awarded interest on the security amount of MUKESH KUMAR KUMAR GUPTA Date:
GUPTA 2026.02.21 CS (Comm.) No. 1006/2025 Rajesh Kumar Vs. MCD & Anr. Page no. 34 of 36 16:48:10 +0530 Rs.81,522/- from 17.04.2023.
47. Now having determined the entitlement of plaintiff to the interest on the security amount, the question remains of the rate on which interest is awarded. Ld. Counsel for the plaintiff has though claimed interest @ 12% per annum but has failed to establish the basis. The award of interest is discretionary as the contract nowhere mentions about the rate of interest on delayed payments. Considering the facts and circumstances of this case as discussed above, 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 security amount of Rs.81,522/-
from pre-suit interest till the date filing of the suit and on the same rate from the date of filing of suit pendentlite and future interest till its realisation. 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). These issue is, accordingly decided in favour of the plaintiff and against the defendants.
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2026.02.21
16:48:16
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(I) CONCLUSION:-
ISSUE No.4: Relief.
48. 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 of interest on late payment against the defendant. The suit of the plaintiff is, accordingly decreed against the defendant No.1 for a sum of Rs. 81,522/- alongwith interest @ 6% per annum as pre-suit interest from 17.04.2023 till the filing of the suit and at the same rate pendentlite and future interest till its realisation. The plaintiff shall also be entitled to the withheld principal amount of Rs.10,000/- which the defendant No.1 shall pay within a period of 60 days from the date of this judgment, failing which, an interest @ 6% per annum shall be payable for the period of delay beyond 60 days.
49. Parties are left to bear their own respective costs.
50. Decree sheet be drawn accordingly.
51. File be consigned to record room after due completion.
Digitally
signed by
MUKESH
PRONOUNCED IN OPEN COURT MUKESH KUMAR
GUPTA
KUMAR
On this 21st February, 2026 GUPTA Date:
2026.02.21
16:48:24
+0530
(MUKESH KUMAR GUPTA)
DISTRICT JUDGE (COMM. COURT)-07
CENTRAL/DELHI(pk)
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