Delhi District Court
Manoj Kumar vs South Delhi Municipal Corporation on 9 October, 2023
~1~
In the court of Sh. Umed Singh Grewal, District Judge-
Commercial Court-05, Central District
Tis Hazari, Delhi.
CS (Comm) No.: 1614/2018
In the matter of:
Manoj Kumar
S/o Late Sh. Shyam Lal
R/o B-5/424, Nand Nagri
Delhi - 110093 ........... Plaintiff
Vs.
South Delhi Municipal Corporation,
(Service be effected through its commissioner)
Dr. Shyama Prasad Mukherjee Civic Centre
(25th floor) Jawahar Lal Nehru Marg
New Delhi - 110002 ........ Defendant
Date of Institution : 17.05.2018
Date on which arguments was concluded : 21.09.2023
Date of pronouncement of judgment : 09.10.2023
Present: Sh. K. D. Sharma, counsel for plaintiff.
Sh. Pritish Sabarwal, counsel for defendant.
JUDGMENT:-
1. This is a suit for permanent and mandatory injunctions and recovery of Rs. 9,23,700/- along with interest and cost.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 1 of 34 ~2~
2. The plaintiff, a well-known advertiser, registered so with the defendant, used to participate in notice inviting tenders for advertisement published by defendant from time to time. One such bid for a unipole site S-69 was also participated by him and he was declared the highest bider consequent to which the defendant, vide allotment letter dated 09.10.2014, informed him that after his acceptance of offer given vide letter 25.06.2014, deposit of security amount equivalent to 3 months license fee, 3 months advance license fee and advertisement tax, he was awarded the contract for display of advertisement through a unipole of the size of 20 x 8 ft. at S-69, Parking Max Hospital, Khirki Extension with latitude and longitude reading as 28 0 31' 7727 & 770 12'7537 for a period of 3 years commencing from the date of issue of the letter, at a monthly license fee of Rs. 3,07,900/- and subject to compliance of terms and conditions duly accepted by him. He deposited the monthly license fee continuously for which the receipts were generated by the defendant. Even before allotment of the site, he had written a letter dated 03.07.2019 that display of advertisement would not be possible on the given site as the height of the pole cannot be increased due to existence of high tension wire above it and also its height can not be lessened as it may cause accident. He had asked defendant to allot him alternative site. On 21.09.2015, the Zonal Officer of the defendants damaged and removed the flex from the unipole without any reason. So, he wrote a letter dated CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 2 of 34 ~3~ 21.09.2015 itself to the defendant to ask its official not to repeat that act in future. But they continued in their pursuit and he had to write another letter dated 30.10.2015.
The defendant sent him a notice dated 06.09.2016 to remove the display because there was such direction by Hon'ble High Court and if he failed to do so, action like cancellation of contract and forfeiture of security was under contemplation. He replied vide letter dated 16.09.2016 that the unipole was installed at the right and correct place on the very first day and it was at a distance of 75 meters from the central point of traffic signal and that distance was measured by the officials of the defendant also at the time of installing. He had further written that despite such situation of the unipole, if the removal was necessary, he was ready to remove but alternative site by provided to him. He wrote another letter dated 03.10.2016 that he had removed the unipole from the location and requested to allot a new location to him. But the needful was not done.
The defendant illegally and malafidely issued a notice dated 14.10.2016 asking him to produce book of accounts regarding display of advertisement at the alloted unipole so as to enable it to access the number of displays and assess the advertisement tax. He gave reply saying that unipole had been removed on 16.09.2016 in view of direction by Hon'ble High Court and that it was reinstalled only on 24.10.2016.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 3 of 34 ~4~ Vide demand notice dated 09.02.2017, the defendant raised illegal demand of Rs. 11,68,167/- up to 23.04.2017 and threatened that if the amount was not deposited, it can take action as per the terms and conditions of NIT, agreement, by-laws and DMC Act. He replied on 17.02.2017 mentioning that the demand was incorrect and also sent his account sheet with the reply and asked defendant to reconcile its account statement with that sheet. The defendant asked him vide letter dated 23.02.2017 to come present for reconciliation of the account statement. He attended the meeting and reconciliation was done. So, he sent a letter dated 28.02.2017 to the defendant that a sum of Rs. 12,00,000/- had been deposited with it and that its calculation was not correct as the unipole was not in exitence from 16.09.2016 to 24.10.2019 and hence, the account be reconciled. He sent letter dated 31.03.2017 informing the defendant that he would deposit the license fee and simultaneously requested not to charge the license fee for the period during which the unipole was not at its place.
But the defendant issued him a show cause notice dated 16.08.2017 to remove the deviation/violation/deficiency within 3 days failing which action would be taken as per the agreements and the DMC Act. He replied vide letters dated 09.10.2017 and 25.10.2017 that the license period was already over and that he had removed the display from the unipole leaving the same at the alloted site. He requested it to take CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 4 of 34 ~5~ possession of the unipole and if it was of the view that it was he who was to remove the same, he was ready to do the needful. But the defendant did not take into account any of his reply and issued him a demand notice under Section 154 (1) of DMC Act dated 15.01.2018 raising demand of Rs. 31,26,633/- up to December, 2017. He was threatened that in case of non compliance, distress warrants like attachment would be issued. He replied vide letter dated 22.01.2018 that nothing was due against him as he had already paid the license fee and that he never committed any violation or deviation.
The first notice dated 06.09.2016 was sent not only to him and rather, it was sent to almost all unipole owners in routine manner. Before issuance of that notice, no notice of penalty was ever served upon him. After reconciling his account with that of the defendant, he deposited Rs. 9.5 lacs and thereafter nothing was due towards him. So, all the notices are illegal, malafide and without any basis and hence he is entitled to a decree of permanent injunction restraining the defendant not to take any action as threatened in notice dated 06.09.2016, 14.10.2016, 09.10.2017, 16.08.2017 and 15.01.2018. Also, he is entitled to a decree of mandatory inunction directing the defendant not to charge the monthly fee for the period during which the unipole was not at its place and also to remove the penalty of 10 % and 15 %. The defendant is also required to refund the security CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 5 of 34 ~6~ amount and license fee for the period during which the unipole kept removed.
3. The defendant came out with the case that the given site was alloted to the plaintiff for three years which expired on 09.10.2017. He was defaulter and violator right from the beginning. During routine inspection of the site, it was found that the unipole had been installed in deviation from the alloted site and hence a notice dated 06.09.2016 was issued to him. Vide show cause notice dated 16.08.2017, he was asked to remove the violation etc.. For first deviation, the penalty is 10% of the annual license fee and for second violation, it is 15% of that fee. The total of both penalties comes out to Rs. 4,30,927/- + Rs. 6,46,390/- = Rs. 10,77,317/-. Letter dated 18.10.2017 was issued to him for cancellation of contract and for forfeiture of security deposit on account of non-removing of violation etc.. He was directed to deposit the outstanding liability which he did not and hence a demand notice under Section 154 (1) of DMC Act was issued in response to which he had sent several frivolous letters without complying with the notice.
It has been admitted that the plaintiff had written a letter dated 03.07.2014 but the allotment of the site was made on 09.10.2014 and if he was not satisfied with the site, he would have withdrawn before allotment but he did not follow that course. It is further mentioned that no flex installed on the CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 6 of 34 ~7~ unipole was ever damaged by the official of the defendant and that such allegation has been leveled just to disrepute the defendant.
Issuance of notice dated 06.09.2016 has been admitted with the rider that during routine inspection on 01.09.2016, it was revealed that plaintiff had installed unipole in deviation from the alloted site and that fact was admitted by him also in letter dated 16.09.2016 to the effect that unipole was standing at a distance of 75 meters from the central point of traffic signal.
Issuance of notice dated 14.10.2016 has also been admitted with the facts that the plaintiff was liable to pay advertisement tax on different display of advertisements and as per clause 14 of the terms and conditions of the contract, he was liable to pay interest @ 2% per month within 30 days of the succeeding quarter. But he did not submit any statement of display. Vide that notice, he was requested too produce his book of accounts/record regarding display advertisements but he did not produce the same.
It is next mentioned that the plaintiff's representation dated 08.06.2017 was rejected by the competent authority holding that he was not entitled to reimbursement of license fee from 16.09.2016 to 23.10.2016. He had conducted violation twice. For first violation, notice was given on 06.09.2016 and for second violation, notice was given on 16.08.2017. But he did not comply with the show cause notice and letter and hence, the CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 7 of 34 ~8~ defendant was constrained to issue notice under Section 154 (1) of DMC Act asking him to deposit a sum of Rs. 31,26,633/- + advertisement tax up to December, 2017 including interest and penalty as applicable under terms and conditions of NIT/agreement, DMC and OAP 2007. The demand includes quarterly license fee up to the last date of the contract i.e. 08.10.2017 and interest @ 2% per month on late payment.
Legal objections are that plaintiff was seeking declaration of the notice as illegal in the guise of permanent and mandatory injunctions and hence the suit was not maintainable. He did not give notice to the defendant under Section 478 of DMC Act before institution of the suit and hence the case is bad due to that reason also. The last objection is that period of limitation provided under Section 478 (2) of DMC Act is six months but it was filed beyond that period.
4. Following issues were framed on 07.03.2022 :-
1. Whether the suit is not maintainable in present form without seeking relief of declaration ? OPD
2. Whether the suit is barred by limitation ? OPD
3. Whether the suit is barred due to absence of notice under Section 478 DMC Act ? OPD
4. Whether the plaintiff is entitled for relief of permanent injunction? OPP CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 8 of 34 ~9~
5. Whether the plaintiff is entitled for relief of mandatory inunction ? OPP
6. Whether plaintiff is entitled for refund of security deposits as claimed ? OPP
7. Relief.
5. In order to prove the case, the plaintiff examined himself as PW1, filed affidavit in evidence as Ex. PW1/A in which he reiterated the facts of plaint. He relied upon following documents :-
1. Ex. PW1/1 (OSR) (Colly) is offer letter dated 25.06.2014 with agreement.
2. Ex. PW1/2 (OSR) to Ex. PW1/5 (OSR) are letters dated 01.07.2014, 03.07.2014, 08.09.2014 and 07.10.2014, respectively of plaintiff.
3. Ex. PW1/6 (OSR) (colly) is allotment letter dated 09.10.2014 of SDMC with money receipt.
4. Ex. PW1/7 (OSR) to Ex. PW1/13 (OSR) are letters dated 12.01.2015, 10.02.2015, 10.03.2015, 11.05.2015, 10.09.2015, 21.09.2015 and 01.10.2015 respectively of the plaintiff with money receipts.
5. Ex. PW1/14 (OSR) is letter of plaintiff to DC/ South Delhi.
6. Ex. PW1/15 (OSR) is allotment letter issued by SDMC on 09.10.2014.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 9 of 34 ~ 10 ~
7. Ex. PW1/16 (OSR) (colly) is letter dated 30.10.2015 of plaintiff with statement of account.
8. Ex. PW1/17 (OSR) to Ex. PW 1/20 (OSR) are letters dated 10.12.2015, 02.05.2016, 14.06.2016 and 22.07.2016 respectively of the plaintiff with money receipt.
9. Ex. PW1/21 (OSR) is notice of SDMC dated 06.09.2016.
10. Ex. PW1/22 (OSR) to Ex. PW 1/26 (OSR) are letters dated 16.09.2016, 03.10.2016, 13.10.2016, 14.10.2016 and 01.02.2017 respectively of the plaintiff.
11. Ex. PW1/27 and Ex. PW1/28 (OSR) (colly) are demand notices dated 09.02.2017 with statement of account.
12. Ex. PW1/29 (OSR) is letter of plaintiff dated 17.02.2017.
13. Ex. PW 1/30 (OSR) is letter of SDMC dated 23.02.2017.
14. Ex. PW1/31(OSR) is letter of plaintiff dated 28.02.2017.
15. Ex. PW1/32 (OSR) (colly) is letter of plaintiff dated 31.03.2017 with statement of account.
16. Ex. PW1/33 (OSR) is show cause notice dated 16.08.2017.
17. Ex. PW1/34 and Ex. PW1/35 (OSR) are letters of the plaintiff dated 09.10.2017 and 25.10.2017.
18. Ex. PW1/36 is letter of the plaintiff dated 24.10.2017.
19. Ex. PW1/37 (OSR) is notice of demand dated 15.01.2018.
20. Ex. PW1/38 (OSR) is letter dated 22.01.2018 of plaintiff.
6. The defendant examined its Commercial Officer Mr. Om Prakash Singh as DW1 and DW2. As DW1, he had CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 10 of 34 ~ 11 ~ mentioned in his affidavit in evidence the facts of another case and that is why the defendant was allowed to file his fresh affidavit in evidence containing the facts of this case. Thereafter he was examined as DW2.
Issue No. 27. Learned counsel for defendant argued that the relief sought by plaintiff is that the defendant be directed not to take action against him in pursuance to various show cause notices. Further relief sought by him is that defendant be directed to refund the security amount. He submitted that the defendant's officials had issued the show cause notices and forfeited the security of the defendant in the discharge of their official duty. So, as per Section 478 (2) of the Delhi Municipal Corporation Act, 1957, the suit should have been filed within six months of accrual of cause of action. The license period of three years was from 09.10.2014 to 08.10.2017 and so, the cause of action had arisen on 08.10.2017 but the suit was filed on 16.05.2018 and hence, it is barred by period of limitation.
On the other hand, learned counsel for plaintiff argued that the officials of the defendant had not acted in discharge of their official duty while forfeiting the security of his client and so the period of limitation is three years, as per the Limitation Act and not six months, from the date of accrual of the cause of CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 11 of 34 ~ 12 ~ action. He admitted that license period had come to end on 08.10.2017.
8. The first point to be considered is whether the officials of the defendant had acted in the discharge of their official duties or not when they issued the notice, shows cause notice and demand notice and while forfeiting the security amount.
It is mentioned in Section 142 of DMC Act 1957 that every person shall have to pay for the advertisement to the defendant which he exhibited on any structure, visible from a public place. As per Section 143 of the Act, no advertisement can be exhibited on any structure within Delhi without the written permission of the Commissioner granted in accordance with the by-laws. Such permission shall become void if the advertisement contravenes by any law. If any advertisement, as per Section 146 of the Act, is exhibited as contravention to the provisions of the Act, the Commissioner may require the occupier of the structure to remove such advertisement. It is mentioned in Section 145 that where any advertisement has been exhibited in contravention to the provisions of the Act or by-laws, it shall be presumed that the person on whose behalf the advertisement was exhibited, had committed the contravention. Section 154 (1) of the Act authorises the Commissioners to send notice to such person if the tax on advertisement is not paid.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 12 of 34 ~ 13 ~
9. The defendant sent first notice dated 06.09.2016, Ex. PW1/21 to the plaintiff alleging that on routine inspection on 01.09.2016, it was found that he had installed the unipole in deviation from the alloted site. He was asked to get the deviation removed and if the same was not removed, action like forfeiture of security etc. would be taken.
Second notice dated 14.10.2016 Ex. PW1/15 was issued so that the plaintiff may produce book of accounts/record regarding display of advertisements because, as per clause no. 13 of terms and conditions, the advertisement tax for each year of the contract was payable in advance and that was to be calculated on the basis of every separate display of advertisement.
Another notice dated 09.02.2017 Ex. PW1/27 was issued asking plaintiff to pay outstanding amount of Rs. 11,68,167/- on account of monthly license fee and advance tax.
The show cause notice dated 16.08.2017 was issued alleging that the plaintiff had violated the terms and conditions of the contract twice. For first violation, he was liable to pay 10% as penalty on the total yearly tax. For second violation, he was liable to pay 15% as penalty. He was asked to pay within 7 days otherwise coercive action were threatened to be taken.
At last, the demand notice under Section 154 (1) DMC Act dated 15.01.2018 was issued asking the plaintiff to pay a sum of Rs. 61,26,633/- plus advertisement tax up to December, 2017 and if the same was not paid or sufficient cause of CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 13 of 34 ~ 14 ~ nonpayment was not shown, warrants of attachment would be issued for the recovery of the same.
10. It is the admitted case of the parties that the plaintiff had taken site no. S-69 on license for displaying advertisements. Allegations against him were that he had erected the unipole in deviation to the alloted site. All the show cause notices and demand notices etc. were issued by the official of the defendant due to that deviation and non payment of license fee and tax etc.. Their actions are covered under Sections 142, 143, 145, 146 and 154 of the Act. Hence it is held that while issuing those notices and forfeiting the security of the plaintiff, the officials/officers of the defendant had acted in discharge of their duty.
In "Shiv Kumar Vs. MCD, RFA 114/2002 decided by Hon'ble Delhi High Court on 26.07.2013", the facts were that a person was doing business of sanitary goods which were lying in the street and hence same were seized by the MCD and did not return the same despite several requests and reminders. The private party filed suit for recovery of value of the goods.
The Hon'ble High Court held in following words that the officials of the MCD had acted in discharge of their duties.
"22. As far as the judgments relied upon by the counsel for the appellant are concerned, it may at CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 14 of 34 ~ 15 ~ the outset be mentioned that the judgment in G.C. Sharma was not considered in M/s Niagara Hotels & Builders (P) Ltd. though subsequent in point of time. Similarly B. L. Gupta also was not noticed in Well Protect Manpower Services Pvt. Ltd. (Supra). The suit in M/s Niagara Hotels & Builders (P) Ltd. (Supra) was for recovery of the amount stated to have been collected by the Delhi Development Authority in excess of that due towards stamp duty and transfer duty under the DMC Act. MCD on whose account transfer duty was collected was also made a party to the suit. MCD took the plea of the suit as far as against it being beyond the period of limitation prescribed in Section 478 (2). It was held that the limitation for recovery of tax illegally collected is of three years and thus Section 478 is not applicable. It was further reasoned that the suit was not in respect of any act done by the MCD but was in respect of the act of the DDA of collecting transfer duty in excess, though on behalf of the MCD. It would thus be clear that the said judgment has no application to the facts of the present case as the action subject matter thereof was not of MCD.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 15 of 34 ~ 16 ~
23. The suit is Well Protect Manpower Services Pvt. Ltd. (supra) was for recovery of balance amount payable under three agreements entered into by the plaintiff with the MCD. Section 478 was held to be not applicable as the rights and obligations of the parties were held to be governed by the agreement between them and the grievance was not against any action of the respondent MCD acting in its statutory capacity. This judgment also is entirely on its own facts and does not take a view different from G. C. Sharma.
24. On the contrary the actions complained of in the present case are in exercise of the statutory powers of the MCD under Sections 321, 322 and 326 of the Act and thus Section 478 would apply."
11. The cause of action arose on the dates of issuance of each notice and it further arose on 08.10.2017 when the license period finally came to an end. Lastly, it arose on 15.01.2018 when the defendant issued a demand notice to the plaintiff under Section 154 (1) of the Act for deposit of Rs. 31,36,633/-. After issuance of that notice, all earlier notices were absorbed by the demand notice Ex. PW1/37 which was issued on 15.01.2018. The suit was to be filed, as per Section 478 (2) of the Act, within CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 16 of 34 ~ 17 ~ six months of that notice date i.e. within six months of 15.11.2018. It was filed on 16.05.2018 and hence, the same is within the period of limitation. This issue is decided in favour of plaintiff and against defendant.
Issue no. 3
12. Learned counsel for defendant argued that before instituting any suit against the defendant, the plaintiff was required to issue notice to his client which he did not and hence it is bad due to that reason.
On the other hand, contention of the counsel for plaintiff is that the suit has been opposed by the defendant by filing WS and it has been contested up to the last. After doing so, the requirement which existed at some point of time for issuance of notice, came to an end.
13. The facts of the present case are quite similar to "Shri Phool Singh Vs. NDMC, RSA No. 264/2013, decided by Hon'ble Delhi High Court on 26th July, 2016". In that case, the Hon'ble Delhi High Court concluded in following words that if the suit was contested till the last by the MCD, the requirement of issuance of notice comes to an end and the suit cannot be dismissed due to non issuance of notice.
" 8. So far as the first question framed above is concerned, it is seen that this very issue was CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 17 of 34 ~ 18 ~ squarly decided by the Division Bench of this Court in the case of Yashod Kumari (Supra) holding that the object of sending statutory notices such as under Section 80 CPC or Section 53 (B) of thhe Delhi Development Act, 1957, and which are provisions of giving of prior notices to the governmental authorities before filing of the suit to see if litigation is not necessary, once the suit is contested to the hilt, then the requirement of giving prior notices is to be taken as waived and suits cannot be dismissed merely on account of the fact that prior statutory notices are not sent. The Division Bench of this Court in the case of Yashod Kumari (Supra) took a practical view because the entire object of provisions such as 80 CPC is really now reduced to a dead letter because in almost 100% of the suits, there is complete contest showing opposition to the grant of reliefs as claimed in the suit, and which reliefs are to be claimed by means of statutory notices given prior to filing of the suit.
9. In view of the Division Bench judgment in the case of Yashod Kumari (Supra) substantial question no. (i) is answered in favour of the appellant/plaintiff and it is held that the CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 18 of 34 ~ 19 ~ conclusion of the courts below of the suit being barred under Sections 477 and 478 of the DMC Act by deciding issue no. 4 against the appellant/plaintiff is against the settled law so far as this court is concerned, and is accordingly set aside by holding that the suit cannot be taken as barred on account of not serving statutory notices under Sections 477 and 478 of the DMC Act. "
Taking cue from above citation, this issue is also decided in favour of plaintiff and against defendant.
Issue no. 1
14. Learned counsel for defendant argued that plaintiff has sought two reliefs. First is permanent injunction directing the defendant not to take any action as per notices dated 06.09.2016, 14.10.2016, 09.10.2017, 16.08.2017 and 15.01.2018. Other sought reliefs are recovery of security amount of Rs. 9,23,700/- and a decree of mandatory inunction directing the defendant not to charge license fee for the period during which the uni-pole was not in existence and not to charge the penalty of 10 % and 15%. He submitted that the notices issued by the defendant to the plaintiff are legal ones and without getting them declared null CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 19 of 34 ~ 20 ~ and void, the relief of only permanent and mandatory injunctions cannot be granted.
Counsel for plaintiff argued that the suit is very much maintainable because perusal of the plaint shows that he is terming each and every notice of the defendant as null and void and has also prayed so. In this regard, he drew the attention of the court towards some paragraphs of the plaint.
15. In "Sarjiwan Singh Vs. Delhi Vidyut Board", 110 (2004) DLT 633, the question before the Hon'ble Delhi High Court was whether it was essential for the plaintiff to pray for declaration holding the electricity bill to be invalid before it could be entitled to pray for consequential relief of injunction against the defendant from taking any step for recovery of the amount mentioned in bills. The High Court held that it was mandatory for the plaintiff to seek relief of declaration.
In "Rajeev Metals Vs. D.S.I.D.C. Limited and others", 2011, latest case law 2700 Delhi, the defendant had cancelled the plot of the plaintiff and plaintiff came to know of that fact through the written statement. In that suit seeking only relief of injunction, the Hon'ble Delhi High Court held that it was mandatory for the plaintiff to seek declaration to the effect that cancellation of his plot vide notice letter dated 24.07.2001 was null, void and non-est. Without seeking such declaration, the High Court held, the suit was not maintainable.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 20 of 34 ~ 21 ~
16. As mentioned earlier, issues to the effect of permanent and mandatory injunctions and entitlement of security amount, have been framed but there is no issue regarding declaration. Now let us go through the plaint to know whether such relief has been claimed or not.
The para no. 12 of the plaint starts with the words "that the alleged notices served upon plaintiff are illegal, without any basis and malafide". It is further mentioned that the plaintiff is not liable to pay any amount as claimed by the defendant vide demand notices. It is mentioned in para no. 13 that the defendant has no legal right to take any action as threatened in notices and it is to withdraw those notices. It is mentioned in para no. 1 of the relief clause that a decree of permanent injunction be passed restraining the defendant not to take any action as threatened in five notices and/or to withdraw the same. So, the body of the plaint shows that it is the plea of the plaintiff that the mentioned five notices are illegal, without any basis and malafide and the defendant should withdraw the same. Hence the plaintiff has very much prayed that the defendant be directed to withdraw those notices but issue to that effect could not be framed. But framing of the issues is the job of the court not of the parties and hence any party cannot suffer if the default of non-framing of issues has been committed by the court. Hence, this issue is decided in favour of plaintiff and against defendant holding that plaintiff has CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 21 of 34 ~ 22 ~ claimed the relief of declaration to the effect that the defendant be directed to withdraw the five notices.
Issue No. 417. Learned counsel for plaintiff argued on first notice dated 06.09.2016 Ex. PW1/21 that the plaintiff had installed the unipole at a distance of 75 meters from the traffic signal and it was wrongly mentioned in that notice that it was installed about 35 - 40 meters from the traffic signal. So, no action should be taken on that notice. His argument on notice dated 14.10.2016 Ex. PW1/25 is that he was not required to produce the book of account/record regarding display of advertisement, to the defendant because the official of the defendant could have verified the display by visiting the site personally and hence, there was no requirement to issue that notice. His argument on notice dated 09.02.2017 Ex. PW1/27 is that he got the unipole removed on 16.09.2016 and reinstalled on 24.10.2016. The unipole was not at its position for one month and eight days and the defendant should not have claimed license fee for that period and hence the notice is bad in law.
On show cause notice dated 16.08.2017 Ex. PW1/33 his argument is that the plaintiff had not violated the terms and conditions of the agreement as he had not removed the unipole from the place at which it was initially installed and hence the defendant should not have demanded penalty amount of 10% for CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 22 of 34 ~ 23 ~ first violation and 15% for the second violation vide that notice. His argument on demand notice Ex. PW1/37 dated 15.01.2018 is that he had paid the monthly license fee excluding the period from 16.09.2016 to 24.10.2016 for which he was not liable to pay as unipole had been removed from its position. Also, he had not committed any violation of removal of the unipole from the original position and hence the defendant should not have issued that notice.
18. On the other hand, counsel for defendant argued that a specific longitude and latitude number was given to the plaintiff at which the unipole was to be installed and that place was to be 75 meters from the traffic signal. But he installed it at a wrong place which was only about 35 meters from the traffic signal and that fact came to light when it inspected the place on 01.09.2016. So, the notice Ex. PW1/21 is valid. Further arguments are that as per clause number 13 of terms and conditions, the plaintiff was to pay advertisement tax for the each year in advance and such tax was payable on each and every display of advertisement for which statement of display was to be furnished by the plaintiff which he did not and hence notice Ex. PW1/25 was issued. He further submitted that the plaintiff did not pay license fee and advertisement tax in advance and that is why notice Ex. PW1/27 was issued.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 23 of 34 ~ 24 ~ On show cause notice Ex. PW1/33 and demand notice Ex. PW1/37, his arguments are that plaintiff was found violating the terms and conditions of the agreement twice as he had shifted the unipole from the place where he was to install it and that is why a show cause notice for imposing penalty of 10% for first violation and 15% for second violation was issued. He did not pay the license fee, penalty and entertainment tax and that is why demand notice Ex. PW1/37 was raised.
19. It is the case of the defendant that the plaintiff had violated the terms and conditions of by-laws prevalent at that time. In that view, following clauses of terms and conditions and guidelines are relevant :-
"Terms and conditions for award of work of repair/maintenance and operation of existing unipoles (with two side/back to back display) against advertisement rights"
13 Deposit of The advertising contractor shall deposit license fees license fee and of three months in advance through demand advertisement draft/pay order with a condition to deposit advance tax MLF for the succeeding quarter in the last month of the preceding quarter i.e. after depositing advance MLF for the first quarter (Jan-March) the advertiser shall be liable to deposit advance MLF for the next quarter (April-June) latest by 31 st of March. Monthly license fees shall be payable by the contractor from the date of commencement of contract. In case the last day of the month being a holiday, the working day preceding the holiday(s)shall be treated as last day for deposition of the license fee. The interest on the account of late CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 24 of 34 ~ 25 ~ depositing of MLF shall be calculated for 'full/complete' month even if the delay is for one day.
The advertisement tax for each year of contract shall be payable in advance by demand draft within one month of the commencement of the contract. Advertisement tax for the whole year as provided in the DMC Act becomes payable in respect of the site even if these have been displayed for less than a year...
14 Non-payment of If the payment is not made in the manner stipulated License Fee above i.e. if payment of MLF of the succeeding quarter is not made by the last day of the proceedings quarter, the advertiser shall be liable to deposit MLF with 2% interest within first 30 days of the succeeding quarter, failing which the contract shall be deemed to have been terminated & security forfeited. The Commissioner SDMC or any other officer authorised by him in this regard, may also get the advertisement display/unipole structure (s) removed and advertisere shall not be entitled to any rebate or compensation in this regard... 17 Security deposit ... The Security deposit will not be adjusted against MLF of the current 'site/contract' but the same will be either adjusted against the dues liability of other sites of the same advertiser, with SDMC or will be refunded to the bidder after successful completion of contract period, without any interest upon it however, subject to deductions/forfeiture which may be applicable on account of non-performance, as the case may be...
27 Breach of The SDMC shall have the right to terminate the Agreement, contract and forfeit security amount if the terms & advertiser/contractor commits breach of any of the conditions and terms and conditions of the restoration of tender/guidelines/agreement, provisions contained contract in the DMC Act or the Bye-laws framed there under, directions contained in Outdoor Advertisement Policy, 2007 or in case any fee, charge tax or any other amount is not paid or for any other reason, the allotment shall be deemed as terminated/canceled/revoked...
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 25 of 34 ~ 26 ~ "Guidelines for registration/renewal of advertiser(s) in advertisement department of South Delhi Municipal Corporation (REVISED)"
17. Penal Action A. The advertiser shall have to abide by all the relevant provisions of the DMC Act, Bye-laws framed there under, orders/directions of the Courts of law, Instructions for Registration/Renewal, the terms and conditions of the contract and also the Notice Inviting Tenders, as may be applicable. The Competent Authority shall have the right to debar an Advertiser, suspend business with him for any period or cancel his registration and/or black-list him, after issue of show cause notice. The decision of the Competent Authority shall be final and binding to all.
B. - - - - - - - - - - - - - -
- - - - - - - - - - - - - - -
Violations Penalty
First violation fees of 10% of amount of Annual
site.
License
Second violation 15% of amount of Annual
License fees of site.
Third violation fees of 20% of amount of Annual site. License Violation in this regard means :
I. Any of the violation of guidelines of Registration/Renewal. II. Any of the violation of terms and conditions of NIT/NOC.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 26 of 34 ~ 27 ~ III. Any of the violation of contract agreement/affidavit & other declarations made by the advertiser. IV. Any violation/deviation from the guidelines for the purpose of display of advertisement.
V. Non compliance or defiance of the directions/orders of the competent authority.
VI. Violation of provisions of DMC Act & Delhi Municipal Corporation (Tax on advertisement other than the advertisement published in the newspapers) Byelaws, 1996 framed under the DMC Act, 1957 as amended from time to time.
VII. Any other violation which the competent authority may decide from time to time.
C. SDMC shall reserve the right to carry out day to day inspections by any official of the Corporation or any other person/agency authorised in this regard and on the basis of inspection report submitted to the competent authority the decision of competent authority on fixing and levying penalty shall be final and binding on the advertiser.
20. The first notice Ex. PW1/21 is regarding the first violation detected by the officers of the defendant when they visited the given unipole on 01.09.2016 and found the same installed within the periphery of 35 - 40 meters from the traffic signal. It is pertinent to mention that as per allotment letter Ex.
PW1/6, the plaintiff was granted license for one unipole of the size of 20 x 8 ft. at S-69, Parking Max Hospital, Khirki Extension with latitude and longitude reading as 280 31' 7727 & CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 27 of 34 ~ 28 ~ 770 12'7537 for a period of 3 years. So, the exact place was told to the plaintiff where the unipole was to be installed. It becomes clear from the notice Ex. PW1/6 that the distance of unipole should have been 75 meters from the traffic signal but it was found only 35 - 40 meters when it was inspected on 01.09.2016. It is the case of the plaintiff himself that pursuant to receipt of that notice, he removed the unipole and reinstalled on 24.10.2016. Though he claimed that he did not committ any violation but that plea has been cut to size by himself by admitting that he himself had removed the unipole after receipt of the notice. So, it is held that notice Ex. PW1/21 is legal and the defendant can not be injuncted from taking any action against the plaintiff on the basis of that violation.
The second notice Ex. PW1/21 is for production of book of account so that the advertisement tax may be assessed by the defendant. As per clause no. 13 of above terms and conditions, the contractor is to pay advertisement tax for each year of the contract in advance within one month of the commencement of the contract. The tax is payable for the whole year even if the advertisement has been displayed for less than a year. For calculation of the advertisement tax, the defendant was in the need of record of the plaintiff regarding separate display of advertisement and for that purpose the notice was issued. The plaintiff did not place on record any document to prove that he had submitted such documents before the defendant in order to CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 28 of 34 ~ 29 ~ enable it to calculate the advertisement tax. Hence, the said notice Ex. PW1/25 is also legal and the defendant cannot be directed not to act upon the same.
The third notice Ex. PW1/27 is on account of non- payment of monthly license fee and advertisement tax for a certain period. Plaintiff's contention is that the unipole remained removed from its place from 16.09.2016 to 24.10.2016 due to notice Ex. PW1/27 of the defendant and so, he is not liable for license fee for that period. In this regard, he had moved a representation before the defendant but the same was dismissed. As observed earlier, the defendant had violated the terms and condition that the unipole was to be at a distance of 75 meters from traffic signal but he installed it only about 35 - 40 meters from that signal. Even if it is presumed that the unipole remained uninstalled from 16.09.2016 to 24.10.2016, the same was due to the violation of installation by plaintiff himself. He cannot be allowed to take benefit of his own wrong. So, he is liable to pay license fee and advertisement tax for that period also and hence the notice Ex. PW1/27 is legal.
21. The defendant asked plaintiff vide notice Ex. PW1/33 to show cause why he should not pay for first and second violation the penalty of 10% and 15% of the amount of annual license fee.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 29 of 34 ~ 30 ~ It has already been held that the plaintiff was guilty of first violation and hence the show cause notice regarding penalty amount of 10% is perfectly valid.
Regarding second violation, it is mentioned in the show cause notice that the plaintiff had violated the terms and conditions second time by installing the unipole in deviation from the alloted site. But it is not mentioned when the said violation came to the knowledge of the defendant. The date of inspection of the site is also not mentioned. Like notice Ex. PW1/21 for first violation, no notice for the second violation was given to the plaintiff. It is the contention of the counsel for defendant that the unipole was inspected second time also and inspection report was prepared. But such inspection report is not on the file. Due to that reason, it is held that the defendant has failed to prove that plaintiff had committed violation of the terms and conditions second time also. So, the show cause notice Ex. PW1/33 in regard to imposition of penalty of 15% is invalid and the defendant is permanently injuncted not to act upon in regard to imposition of penalty of 15%.
Demand notice Ex. PW1/37 is for a sum of Rs.
31,26,633/- + advertisement tax. That amount includes first penalty @ 10% of the annual license fee amounting to Rs. 4,30,927/- and second penalty @ 15% of the annual license fee amounting to Rs. 6,46,390/-. It has already been held that imposition of penalty of 15% for second violation is not legal CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 30 of 34 ~ 31 ~ and hence the demand notice Ex. PW1/37 to that extent is not legal. Though the amount mentioned in the notice is Rs. 31,26,633/- + advertisement tax but in calculation chart filed at the time of final arguments, the said amount is Rs. 31,07,628/-, bifurcation of which is as under :-
Balance License Fee as on 6,45,618
15.01.2018
Interest of L/F upto 15.01.2018 4,60,993
First Penalty 10% 4,30,927
Second Penalty 15% 6,46,390
Security amount forfeited. 9,23,700
However, not recovered
Total Dues 31,07,628
But the defendant is not entitled to the second penalty of 15% and so, after deduction of amount of that penalty, the net comes out to Rs. 31,07,628/- - Rs. 6,46,390/- = Rs. 24,61,238/-. The demand notice Ex. PW1/37 is found legal to the tune of Rs. 24,61,238/- and the defendant is at liberty to act against the plaintiff regarding that amount.
22. In view of the above discussion, this issue is decided accordingly.
Issue No. 523. The plaintiff is seeking mandatory inunction that direction be given to the defendant not to charge the license fee CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 31 of 34 ~ 32 ~ for the period during which the unipole was not at its place i.e. from 16.09.2016 to 24.10.2016 and further, the defendant be directed not to charge penalty of 10% and 15%.
It has already been held that plaintiff is liable to pay the license fee even for the period from 16.09.2016 to 24.10.2016 during which the unipole remained removed due to his default. Also, it has already been held that the defendant was quite justified in imposing the penalty of 10% for first violation. But it was not justified to impose penalty of 15% for second violation. So, this issue is decided accordingly.
Issue No. 624. It is undisputed fact that the plaintiff had finished bank guarantee of Rs. 9,23,700/-. As per clause 14 of terms and conditions if the license fee is not paid along with 2% interest within first 30 days of the succeeding quarter, contract shall be deemed to have been terminated and security forfeited. It is the admitted position of even plaintiff that he did not pay license fee from 16.09.2016 to 24.10.2016. So, the defendant is quite justified in invoking the clause no. 14 of terms and conditions in forfeiting the security amount.
But during arguments, the defendant filed two letters written by it to Union Bank of India regarding the bank guarantee/security amount. Vide first letter dated 14.09.2018, the branch manager of Union Bank of India was requested that the CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 32 of 34 ~ 33 ~ bank guarantee of Rs. 9,23,700/- furnished by plaintiff may be released in favour of Commissioner, SDMC in the form of demand draft. The bank replied vide letter dated 27.09.2018 that the validity of the bank guarantee was upto 15.09.2017 and the same had expired and so, it did not have any liability to pay the bank guarantee.
Now, the net position is that though the order regarding forfeiture of bank guarantee has been passed by defendant but the amount is still available with the plaintiff.
25. This issue is decided against plaintiff and in favour of defendant.
Court Fee
26. In a circuitous way, the plaintiff is trying to avoid the liability of Rs. 31,26,633/- mentioned in demand notice Ex. PW1/37. The valuation para 16 of the plaint shows that for the purpose of court fee for jurisdiction and for permanent injunction, the suit has been valued at Rs. 130/- and for mandatory injunction also at Rs. 130/-. The liability of that amount cannot be avoided by valuing the suit of only Rs. 130/- + Rs. 130/- = Rs. 260/-. The plaintiff did not pay the court fee on the amount which he wants to evade by challenging the demand notice. So, he is liable to pay court fee on amount of Rs. 31,26,633/- mentioned in demand notice under Section 154 (1) of CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 33 of 34 ~ 34 ~ the DMC Act within one month of pronouncement of the judgment. The order passed on payment of above court fee shall form integral part of this judgment.
Issue no. 7
27. The notice Ex. PW1/33 dated 16.08.2017 is set-aside to the extent of imposing of penalty of 15% for second violation and the defendant is directed not to take any action against the plaintiff to that extent. Similarly, the demand notice Ex. PW1/37 is also set-aside to the extent of imposing of penalty of 15% totaling to Rs. 6,46,390/- regarding second violation. After filing of fresh calculation chart and after deducting the 15% amount, the amount of demand notice comes out to Rs. 24,61,238/-. The show cause notice is valid to that amount. The plaintiff is not entitled to the security deposit.
Decree sheet be prepared accordingly. File be consigned to record room.
Digitally
signed by
UMED
UMED SINGH
Announced in open court
SINGH Date:
2023.10.09
16:42:23
on 09th day of October, 2023 +0530
(UMED SINGH GREWAL)
District Judge-Commercial Court-05
Central District, Delhi.
CS (COMM) No.: 1614/18 Manoj Kumar Vs. SDMC Page No. 34 of 34