Delhi District Court
Praveen Sood vs United India Insurance Com. Ltd on 22 January, 2025
In The Court of Sh. Hem Singh,
District Judge-01, (East),
Karkardooma Courts, Delhi.
CS No.220/2020
CNR NO. DLET01-000697-2011
In the matter of :-
Praveen Sood
Proprietor of Woodecor,
GH- 10/76D, Outer Ring Road,
Paschim Vihar,
New Delhi.
.....Plaintiff
Versus
United India Insurance Company Ltd.
Regional Office:- II Core 1, 2nd Floor, Scope Minar,
Laxmi Nagar, Delhi-110092,
Through its DGM.
Also at:-
Head Office:- 24, Whites Road,
Chennai-14.
.....Defendant
Date of Institution : 17.12.2011
Date of Reserving Order : 18.01.2025
Date of Decision : 22.01.2025
SUIT FOR RECOVERY OF Rs.8,89,088.87/-
JUDGMENT
(I) BRIEF FACTS :-
Digitally
CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.1/17 signed by
HEM
HEM SINGH
SINGH Date:
2025.01.22
16:36:48
+0530
1.) Present suit for recovery of Rs.8,89,088.87/- along-with interest pendente-lite and future interest @ 18% per annum till realization of the amount filed by the plaintiff against the defendant.
a) The plaintiff is the sole proprietor of M/s Woodecor engaged in the business of Builders interior decorators and furnishers. The case of the plaintiff is that defendant had invited tender/ bid regarding interior work of its office at Second Floor, Core-1 and First Floor, Core-4, Scope Minar Building, Laxmi Nagar, New Delhi and plaintiff had applied for and finally tender was awarded to the plaintiff which was on item rate basis and not on lump sum basis. Thereafter, plaintiff deposited the demand draft no.369341 dated 26.12.2003 in favour of defendant vide acceptance letter dated 26.12.2003. The plaintiff-Firm has provided its services to the defendant as per the tender executed by it and the said work was also completed as per the schedule. The said work also got verified by the defendant's Architect from Architect M/s Planners India, New Delhi. The total cost of the said work including the cost of extra work and vitrified tiles was Rs.52,20,626/-. After completion of work, plaintiff-Firm raised a final bill dated 23.07.2007 amounting to Rs.47,03,459.49/- (excluding the cost of extra work and vitrified tiles), however, only Rs.40,98,618/- were sanctioned by the defendant. Despite the fact that defendant's architect had visited and verified the work twice, the remaining payment along-with cost of extra work and vitrified tiles has not been released. After adjustments and payment released by the defendant, there is still outstanding amount of Rs.8,89,088.87/- along-with interest due against the CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.2/17 Digitally signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:36:53 +0530 defendant. Despite various reminders and requests made by the plaintiff-Firm on 23.08.2009, 23.02.2010, 08.05.2010, 14.07.2011 and 12.09.2011 to the defendant to make the outstanding payment, the same has not been made till date.
Thereafter, plaintiff sent legal notice dated 11.08.2011 to the defendant, but to no avail. Hence, this suit.
2.) Upon receipt of summons, defendant put the appearance and defend the suit.
3.) Written statement was filed by the defendant demanding dismissal of suit being devoid of merits and abuse of process of law. It is admitted by the defendant in its written statement that plaintiff's tender was accepted for the work of interior decoration in respect of office of defendant at Second Floor, Core-1 and First Floor, Core-4, Scope Minar Building, Laxmi Nagar, Delhi vide work order dated 16.01.2004. In defence, it is averred that the final bill of Rs.47,03,459.49/- raised by the plaintiff was duly scrutinized by the Architects from office of M/s Planners India Architects (P) Ltd. and final bill of Rs.40,98,618/- was approved by them. It also admitted by the defendant that plaintiff has provided its services and completed the work as per the schedule mentioned in the contract. It is averred that rates of different items and cost of work had been clearly fixed after negotiation on the basis of financial bid. Further, the legal notice issued by the plaintiff is a matter of record, however, the contents of the said notice are wrong since the perusal of same reveals that plaintiff claimed Rs.7,71,954.47/- along-with interest from the defendant.
Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.3/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:36:58 +0530 The defendant has duly furnished its reply to the said legal notice vide letter dated 23.12.2011. The defendant has denied all other allegations/ claims raised by the plaintiff against it in the plaint and each and every facts relied upon by the plaint is completely wrong and false.
4.) Plaintiff filed the replication to the written statement wherein the contents of the written statement are denied and averments made in the plaint are reiterated and affirmed.
(II) ISSUES:-
From the pleadings, following issues were framed vide order dated 29.03.2014:-
a) Whether the plaintiff is entitled to recover the suit amount from the defendant? (OPP)
b) Whether the plaintiff is also entitled to recover any interest, if so, at what rate? (OPD)
c) Relief.
(III) EVIDENCE:- 1.) In order to substantiate its case, Plaintiff has examined two witnesses:- a) PW1- Mr. Praveen Sood, Proprietor of plaintiff-Firm
himself stepped in witness box as PW1 and tendered his evidence by way of affidavit Ex.PW-1/A. In his affidavit Ex. PW-1/A, PW-1 has reiterated the facts averred in the plaint and has placed CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.4/17 Digitally signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:03 +0530 reliance on the following documents:
a) Ex.PW1/1 (OSR)- Photocopy of acceptance letter.
b) Ex.PW1/2 (OSR)- Copy of letter issued by Planners India regarding scrutiny and verification of final bill. (Objected to the mode of proof).
c) Ex.PW1/3- Attested copy of statement of account of State Bank of India for the period 01.07.2010 to 09.09.2010 and 27.10.2010 to 07.12.2010.
d) Ex.PW1/4 (colly)- Attested copies of statement of account of Punjab National Bank w.e.f. 02.04.2004 to 07.05.2004, w.e.f. 02.08.2004 to 31.08.2004, w.e.f. 26.11.2005 to 20.12.2005, w.e.f. 07.03.2006 to 16.03.2006 and w.e.f. 29.10.2007 to 15.11.2007.
e) Ex.PW1/5 and Ex.PW1/6- Office copy of request and demand letter dated 23.08.2009 and 23.02.2010.
f) Ex.PW1/7 and Ex.PW1/8- Office copy of reminder dated 08.05.2010 and 14.07.2011.
h) Ex.PW1/9- Postal receipt.
j) Mark A- Copy of legal notice dated 11.08.2011.
PW1 was exhaustively cross-examined by counsel for the defendant.
b) PW2- Sh. Pankaj Saini was examined as PW2 as summoned witness, who was appointed as an Architect by United India Insurance for designing and supervision of their office. He has been extensively cross-examined by Ld. Counsel for Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.5/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:08 +0530 defendant and discharged.
Thereafter, vide separate statement of proprietor of plaintiff- Firm dated 24.08.2017, plaintiff's evidence was closed.
2.) In order to substantiate the case, defendant has examined one witness, namely:-
a) DW1- Mr. Pradeep Kumar, Deputy Manager, United India Insurance Company Ltd. was examined as DW1 and he has tendered his evidence by way of affidavit Ex.DW1/A. DW1 has relied upon only one document i.e. Ex.DW1/1 i.e. Copy of reply dated 23.12.2011. He has been cross-examined at length by Ld. Counsel for the plaintiff. Thereafter, vide order dated 23.12.2019, DE was closed.
(IV) Final arguments heard. Record perused. Considered.
Written arguments filed on behalf of the plaintiff.
(V) ISSUE-WISE FINDINGS :-
(ISSUE NO. I) Whether the plaintiff is entitled to recover the suit amount from the defendant? (OPP)
a) The onus to prove this issue is upon the plaintiff. Ld. Counsel for the plaintiff argued that the plaintiff is entitled for the suit amount as admittedly, the plaintiff has completed the work awarded to it by the defendant to the full satisfaction of the defendant and as per the terms of the contract. It is further argued that the plaintiff also executed extra work and installed Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.6/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:13 +0530 vitrified tiles at the request of the defendant at the office of the defendant and despite the completion of the said extra work, the payment towards it was not released to the plaintiff. It is also argued on behalf of the plaintiff that DW1 has no authority to depose on behalf of the defendant-Company as no authority letter/ board resolution filed in this regard. Ld. Counsel for the plaintiff also relied upon the following judgments:-
i) J. Devender Reddy Vs. Kakatiya University, 2014 SCC Online Hyd 1084.
ii) Sanjeev Kumar Vs. State of J&K, 2020 SCC Online J&K 392.
iii) Ashok Kumar & Ors. Vs. State of U.P. & Ors., MANU/UP/1534/2013.
iv) Vipin Gupta Vs. Chitra Advertising, AIR 1995 DELHI 65.
v) Nibro Limited Vs. National Insurance Co. Ltd., 41 (1990) DLT 633.
vi) Janki Vashdeo Bhojwani & Anr. Vs. Indusland Bank Ltd. & Ors., VII (2004) SLT 441.
vii) United Bank of India Vs. Naresh Kumar, AIR 1997 SC 3.
viii) Sports Development Authority of Tamil Nadu Vs. Tarapore & Co., 2006 SCC Online Mad 546.
ix) Union of India & Ors. Vs. K.V. Ram Mohan Rao & Ors., MANU/AP/0265/2011.
b) On the other hand, Ld. Counsel for the defendant argued that full and final payment of Rs.40,98,618/- towards the final Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.7/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:18 +0530 bill of Rs.47,03,459.49/- as per the recommendation of the M/s Planners India Architects (P) Ltd., was already released to the plaintiff-Company and therefore, there is no further liability remained upon the defendant-Company. It is further argued that the extra work, if any executed by the plaintiff is outside the scope of the contract between the parties. Therefore, defendant- Company is not liable to pay any amount towards alleged extra work done by plaintiff-Company.
c) First point for consideration is whether the defendant had awarded work of interior renovation of its office at Second Floor, Core-I and First Floor, Core-4, Scope Minar Building, Laxmi Nagar, Delhi to the plaintiff. It is the case of the plaintiff that he had performed interior and renovation work at the office of the defendant situated at Scope Minar Building, Laxmi Nagar, Delhi. It is further case of the plaintiff that during the said work the plaintiff had also done some extra work at the said office at the will of the defendant however the payment for the said extra work had not been released by the defendant despite various requests and Legal Notice. In written statement the defendant has admitted that the work of interior decoration at the aforesaid office of the defendant was awarded to the plaintiff. It is further stated in the written statement that the plaintiff had completed the said work and raised the Bills and after scrutiny of the said bills by the M/s Planners India Architects a payment of Rs. 40,98,618.00 was approved and released to the plaintiff. It is further stated in the written statement that after the said payment no dues are outstanding in favour of the plaintiff.
Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.8/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:23 +0530 Therefore, it is not in dispute that the defendant had awarded the work of interior renovation at the office of the defendant at Second Floor, Core-I and First Floor, Core-4, Scope Minar Building, Laxmi Nagar, Delhi to the plaintiff.
d) The second point for the consideration arose is whether the plaintiff has executed the said work as per the agreed terms of contract between plaintiff and defendant. It is stated in the plaint that plaintiff had completed the said work to the full satisfaction of the defendant. Even in the written statement, it is stated by defendant that the plaintiff had completed the said work. The fact of completion of work by the plaintiff is also admitted by the defendant in cross-examination of DW1. The relevant part of the cross-examination of DW1 is reproduced herein below:_ "It is correct that the plaintiff completed the work as per the work order dated 16.01.2004 issued to him. The company was satisfied with the work which was executed by the plaintiff as per the contract".
e) During the cross-examination, DW1 also admitted that security amount for the defect liability period was returned to the plaintiff. The relevant part of the cross-examination of DW1 is:- "there is a clause with regard to the retaining the security amount for the defect liability period which is one year from the date of completion of the work, the security amount for the defect period was returned to the plaintiff".
f) Since the security amount was returned to the plaintiff by Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.9/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:32 +0530 the defendant, it can be inferred that defendant was satisfied with the work of the plaintiff. In view thereof, it can be concluded that plaintiff had executed the work as per the agreed terms between the parties and to the full satisfaction of defendant.
g) The third point which arises for consideration is whether the plaintiff has executed any extra work and during execution of the said extra work had installed vitrified tiles at the aforesaid office of defendant and if so, what was the cost of extra work and vitrified tiles.
h) It is the case of the plaintiff that at the will of the defendant, plaintiff has also executed some extra work and installed vitrified tiles at the aforesaid office of defendant and after completion of all work, defendant was liable to pay the total amount of Rs.52,20,626/- to the plaintiff.
i) The execution of extra work and installation of vitrified tiles are also not disputed by the defendant. However, it is stated in the written statement that after completion of work, plaintiff raised the final bill for a sum of Rs.47,03,459.49/- and as per the agreed terms of contract the said bill was duly scrutinized and verified by M/s Planners India Architects (P) Ltd. i.e. the architect duly appointed by defendant for verification of work executed by the plaintiff and scrutinized bill was submitted to the defendant and an amount of Rs.40,98,618/- was released to the plaintiff as full and final cost of the work executed by Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.10/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:37 +0530 plaintiff.
j) During the cross-examination of DW1, a specific question was put to him by Ld. Counsel for plaintiff. The said question and answer thereof is reproduced herein:-
"Ques.1. I put to you that defendant had the liability to make the payment of Rs.52,60,526/- to the plaintiff whether the said amount has been paid or not?
Ans. The payment was assessed by the Architect, M/s Planner India Architect Pvt. Ltd. and the payment was made as per the said assessment".
k) The witness had not denied the specific question that defendant- Company had the liability to make the payment of Rs.52,60,626/- to the plaintiff and vague reply was given that payment was made as per assessment made by M/s Planners India Architects (P) Ltd.
l) During the cross-examination of DW1, document Mark DW1/P3 was shown to the witness. The said document issued by M/s Planners India Architects (P) Ltd. to defendant in respect of scrutiny and verification of final bill along-with the scrutinized final bills of plaintiff. The DW1 has admitted that stamp on the said document is of the defendant. It is further admitted by DW1 that in final assessment of the bill of plaintiff, cost of vitrified tiles and extra items are not included.
The relevant part of the cross-examination of DW1 is reproduced hereunder:-
"It is correct that the stamp on the letter Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.11/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:43 +0530 is of our office. It is correct that as per the letter, the architect has claimed to have scrutinized and verified the bill for the amount of Rs.40,98,618/-. It is also correct that the said amount was exclusive of cost of vitrified tiles and extra items executed at the site as the approved rates for the said items are not available with the architect".
m) In cross-examination conducted on 11.12.2018, DW1 stated that "it is also correct that the said amount was exclusive of cost of vitrified tiles and extra items executed at the site as the approved rates for the said items are not available with the Architect". However, during the cross-examination conducted on 01.06.2019, DW1 deposed that "the amount of Rs.42,00,000/- paid to the plaintiff included the payment towards vitrified tiles. An amount of Rs.8,00,000/- approximately was paid to the plaintiff towards the vitrified tiles".
n) Further, from the said deposition of DW1, an inference of admission of liability of defendant towards plaintiff for payment of vitrified tiles can be taken. DW1 had already admitted that final amount of Rs.40,98,618/- released to the plaintiff on final assessment of M/s Planners India Architects (P) Ltd., was exclusive of cost of extra work and vitrified tiles. No evidence in respect of payment of Rs.8,00,000/- towards the cost of vitrified tiles was led by the defendant.
o) In view of the abovementioned consideration, it can be Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.12/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:48 +0530 concluded that there was liability upon the defendant towards the plaintiff for payment of extra work and vitrified tiles as the cost of said items was not included in document Mark DW1/P3 (colly) by M/s Planners India Architects (P) Ltd.
p) It is argued by Ld. Counsel for the defendant that said extra work and installation of vitrified tiles was never a part of the contract between plaintiff and defendant, therefore defendant has no liability to pay any amount towards the said cost.
q) Ld. Counsel for the plaintiff had drawn the attention of this Court towards the Section 70 of Indian Contract Act, 1872 and the same is reproduced herein:-
"70.Obligation of person enjoying benefit of non-gratuitous act.--Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.
Section 70 of the Indian Contract Act, 1872 is attracted on satisfaction of certain conditions.
The first condition is that a person should lawfully do something for another person or deliver something to him;
the second condition is that doing the said thing or delivering the said thing, he must not intend to act gratuitously and the third condition is that the other person for whom something is done or to whom something is delivered, must enjoy the benefit thereof".
Digitally signed by CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.13/17 HEM HEM SINGH SINGH Date:
2025.01.22 16:37:53 +0530
r) It is argued that the extra work was executed at the will of defendant. No-objection was raised at the time of execution of extra work and defendant is enjoying the benefits of extra work.
The said work was never done by the plaintiff gratuitously. Therefore, in view of the admission made during the cross- examination of DW1, defendant is liable for payment of extra work to the plaintiff.
s) The Hon'ble High Court in CS (OS) 215/2019 titled as "M/S Apco-Titan (Jv) vs NATIONAL HIGHWAYS AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD." decided on 22.10.2019 discussed the scope of Section 70 of Indian Contract Act and observed as under:-
"If a person delivers something to another it would be open to the latter person to refuse to accept the thing or to return it; in that case Section 70 would not come into operation. Similarly, if a person does something for another it would be open to the latter person not to accept what has been done by the former; in that case again Section 70 would not apply. In other words, the person said to be made liable under Section 70 always has the option not to accept the thing or to return it. It is only where he voluntarily accepts the thing or enjoys the work done that the liability under Section 70 arises"
t) In the present case, the defendant has accepted that extra work done by the plaintiff and even enjoying the benefits of the said work. Therefore, in view of the settled proposition of law, the arguments addressed by Ld. Counsel for the defendant that Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.14/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:37:59 +0530 since the extra work and installation of vitrified tiles are outside the scope of the contract between the parties, therefore the defendant is not liable to pay the cost thereof to the plaintiff is not tenable.
u) As per the case of plaintiff, total cost of the work including the cost towards extra work and vitrified tiles is Rs.52,20,626/-. Initially, the plaintiff has raised a bill of Rs.47,03,459.49/- in which the cost of extra work and vitrified tiles were not included. Against the said bill, defendant-
Company after scrutiny and verification of the said bill by M/s Planners India Architects (P) Ltd., released a sum of amount Rs.40,98,618/- to the plaintiff. The plaintiff has never raised any objection to the said scrutiny and assessment of the said bill by M/s Planners India Architects (P) Ltd. Even plaintiff has examined Sh. Pankaj Saini from M/s Planners India Architects (P) Ltd. as PW2 and nothing has come on record that plaintiff is disputing the final assessment of said bill done by M/s Planners India Architects (P) Ltd. Further, the plaintiff also admitted in plaint that the plaintiff has received a total sum of Rs.43,31,539/- from the defendant against the above said bill. Therefore, it can be concluded that there is no dispute with regard to final assessment of said bill. However, the said bill does not include the cost of extra work and vitrified tiles. Ld. Counsel for the plaintiff drawn the attention of this Court to the letter dated 07.04.2005 earlier marked as Mark DW1/P5 and subsequently exhibited as Ex.DW1/P8 (OSR) wherein the rate and measurements of vitrified tiles are mentioned. As per the CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.15/17 Digitally signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:38:06 +0530 rate and measurement mentioned in the Ex.DW1/P8, the cost vitrified tiles comes to Rs.5,41,840/-.
v) Ld. Counsel for the plaintiff has argued that without any authorization letter, DW1 cannot depose on behalf of the defendant-Company. Perusal of the affidavit of evidence of DW1 shows that same has been filed by DW1 on behalf of defendant-Company and in cross-examination, DW1 has deposed that there is no authority letter in his favour to depose, however, he has been instructed orally by the defendant-
Company to depose on its behalf. In affidavit of evidence of DW1, it is stated that DW1 is well-versed with the facts of the case as per the record. However, during cross-examination, he has stated that he was not working in the concerned Department of defendant-Company during relevant period. Since the DW1 had not been working in the concerned Department of defendant-Company during relevant period, it cannot be said that the relevant record pertaining to this case was maintained by the DW1. Therefore, without any authorization letter/ circular/ standing order, DW1 cannot depose on behalf of the defendant- Company.
w) Therefore, this issue is decided in favour of the plaintiff and against the defendant to the extent of Rs.5,41,840/-.
(ISSUE NO.2) Whether the plaintiff is also entitled to recover any interest, if so, at what rate?
(OPD) Digitally CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.16/17 signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:38:11 +0530
a) The plaintiff has prayed for an interest @ 18% per annum.
However, no evidence has been led by the plaintiff to prove his entitlement for such rate of interest. In view of the fact that the nature of transaction between the parties is commercial, the plaintiff is held entitled for interest @ 10% per annum from the date of legal notice dated 11.08.2011 till realization.
RELIEF
a) In the light of the aforesaid finding, the suit of the plaintiff is partly decreed for recovery of Rs.5,41,840/- along-with future interest @ 10% per annum from the date of legal notice dated 11.08.2011 till realization.
Cost of the suit is also awarded as per rules. Decree sheet be prepared accordingly.
Ordered accordingly.
File be consigned to the record room.
Digitally signed by HEM HEM SINGH SINGH Date:
2025.01.22 16:38:16 Announced in the open +0530 Court on 22.01.2025 (Hem Singh) District Judge-01 (East)/KKD/Delhi CS NO.220/20 (Praveen Sood VS. United India Insurance Co. Ltd.) PgNo.17/17