Delhi District Court
Rajeev Mittal vs The Commissioner on 25 January, 2025
DLCT010038962020
IN THE COURT OF SH. SANJEEV KUMAR AGGARWAL :
DISTRICT JUDGE (COMMERCIAL) -01 : CENTRAL, TIS HAZARI
COURTS, DELHI
CS (Com.) No. 1236/24
Sh. Rajeev Mittal
S/o Sh. Gopal Dass,
Proprietor of M/s Rajeev Mittal,
A-9, Satyawati Colony,
Ashok Vihar, Phase-III,
Delhi-110052
....Plaintiff
Versus
The Commissioner,
North Delhi Municipal Corporation
Dr. S.P.M. Civil Centre, Minto Road
New Delhi - 110002.
....Defendant.
SUIT FOR RECOVERY OF Rs. 2965549/-.
Date of institution : 01.07.2020
Date of reserving Judgment : 23.01.2025
Date of decision : 25.01.2025
CS (Comm) No. 1236/24 Page No. 1 of 31
Rajeev Mittal Vs. The Commissioner, NDMC
JUDGMENT
1. Vide this Judgment, I shall decide the present suit filed by the plaintiff against the defendant for recovery of amount of Rs. 29,65,549/-.
2. It is worthwhile to mention here that initially the plaintiff has filed the present suit as ordinary civil suit before the Court of Ld. District Judge (Central) but same was transferred to this Court in pursuance of the order dated 15.07.2014 passed by Hon'ble Delhi High Court in CM(M) No. 1504/2023, title Rajeev Mittal Vs. The Commissioner, NDMC.
3. Brief facts as stated by the plaintiff in the plaint are that plaintiff is carrying the business of construction and other related activities and is running the said business in the proprietorship of M/s Rajeev Mitta, of which plaintiff is the sole proprietor. It is further stated that defendant authority / body is meant for providing the facilities within Delhi and is governed by Delhi Municipal Laws. It is further stated that defendant assigned the various work orders to the plaintiff through tenders through its division (KPM-I). It is further stated that plaintiff after accepting the said work orders, executed the said work within the time frame with the satisfaction of the defendant, the details thereof are as under :-
Sr. Work Order Date Gross (In Date of bill Interest No. No. Rs.) passing thereon upto 28.06.2020
1. 514 31.03.2015 5,25,962 14.09.2015 Rs.
3,02,603/-
2. 514 31.03.2015 45,000 25.08.2017 Rs. 15,375/-
3. 136 26.02.2016 11,28,000 29.07.2016 Rs.
5,30,160/-
CS (Comm) No. 1236/24 Page No. 2 of 31Rajeev Mittal Vs. The Commissioner, NDMC
4. 136 26.02.2016 90,000 12.07.2018 Rs. 21,240/-
5. 409 26.02.2016 45,000 12.07.2018 Rs. 10,620/-
6. 410 02.01.2015 70,000 12.07.2018 Rs. 16,520/-
7. 457 02.01.2015 65,000 31.07.2018 Rs. 14,950/-
8. 145 07.01.2015 51,343 25.08.2017 Rs. 17,510/-
9. 136 10.03.2016 13,161 12.07.2018 Rs. 3,105/-
Total 20,33,466/- Rs.
9,32,083/-
4. It is further stated that work order no. 514 & 136 were completed by the plaintiff and the concerned division of defendant had prepared the bills and the final bill of said work done was finalized on 25.08.2017 & 12.07.2018 respectively. Hon'ble High Court of Delhi vide judgment dt. 23.01.2017 passed in Writ Petition No. 11799/2015 had directed to pay the bill amount within timeline and ordered that no payments shall be released out of turn to any party, a period of three years and 90 days reckoned from the date of concerned division as passed the bills of the contractors for the payment shall be period from which the payment shall be start to made to the contractor. But defendant has not paid the total principal amount of Rs. 20,33,466/- despite repeated requests, hence, the defendant is liable to pay a total sum of Rs. 29,65,549/- ( Rs. 20,33,466/- towards principal amount and Rs. 9,32,083/- as interest from the date of passing of each bill to 28.06.2020), alongwith pendentelite and future interest. Hence, the present suit.
5. Summons of the suit were sent to the defendant and defendant contested the same by filing written statement. In the written statement, defendant has stated that the present suit is premature & without any cause CS (Comm) No. 1236/24 Page No. 3 of 31 Rajeev Mittal Vs. The Commissioner, NDMC of action and time barred, therefore, liable to be dismissed. Though it is admitted that plaintiff was awarded work orders no. 514 dt. 31.03.2015, 409 dt. 02.01.2015, 410 dt. 02.01.2015, 457 dt. 07.01.2015, 145 dt. 10.03.2016 and 136 dt. 26.03.2016 but stated that as per clause-7&9 of the GCC, the plaintiff is required to submit the bill but the plaintiff has not submitted the bills, therefore, in the absence of the bill no amount is to be payable to the plaintiff. It is further stated that said issue regarding failure of contractors to submit the bills have been dealt with by Hon'ble Delhi High Court in its judgment dt. 22.03.2018 passed in case RFA No. 430/2017 titled as North Delhi Municipal Corporation Vs. Sanjeev Kumar. It is further stated that the present suit with respect to work orders No. 514, 136 & 145 is barred by limitation as these work orders pertain to March-2015, March-2016 and February-2016 respectively, therefore, period of limitation to file the present suit qua these work orders, is three years, which has been expired, as the suit has been filed only on 30.06.2020.
6. On merits, again defendant has stated that the plaintiff is not entitled for recovery of the bill amount of those work orders as the bills were not submitted by the plaintiff as per guidelines / terms of the NIT, work orders and the GCC.
7. Plaintiff has filed replication in which he has denied the contents of written statement as incorrect and reiterated the contents of plaint as true and correct. It is stated by the plaintiff that bills / invoices were raised by the plaintiff as per the work done by the plaintiff and thus, the plaintiff is entitled to recovery of the suit amount.
CS (Comm) No. 1236/24 Page No. 4 of 31Rajeev Mittal Vs. The Commissioner, NDMC
8. After completion of the pleadings, following issues were framed on 24.09.2024 :-
1. Whether the suit is barred by limitation ? OPD
2. Whether the plaintiff has not submitted the bills, if so what effect ? OPD
3. Whether the plaintiff has not complied with the clause-45 of GCC, if so what effect ? OPD
4. Whether the plaintiff is entitled to recover principal amount of Rs. 20,33,466/- ? OPP
5. Whether the plaintiff is entitled to interest on the said amount, if so, at what rate and for which period ? OPP
6. Whether plaintiff is entitled to pendentelite and future interest, if so, at what rate ? OPP
7. Relief.
9. In order to prove his case, the plaintiff has examined himself as PW1 who led his evidence by way of affidavit Ex. PW1/A. and relied upon the following documents :-
1. Copy of legal notice dated 24.1.2020 along with postal receipt as Ex. PW1/1.
2. Copy of work order No. 514 dated 31.3.2015 as Ex.
PW1/2 (being admitted).
3. Copy of work order No. 136 dated 26.2.2016 as Ex.
PW1/3 (being admitted).
4. Copy of work order No. 409 dated 2.1.2015 as Ex.CS (Comm) No. 1236/24 Page No. 5 of 31
Rajeev Mittal Vs. The Commissioner, NDMC PW1/4 (being admitted).
5. Copy of work order No. 410 dated 2.1.2015 as Ex.
PW1/5 (being admitted).
6. Copy of work order No. 457 dated 7.1.2015 as Ex.
PW1/6 (being admitted).
7. Copy of work order No. 145 dated 10.3.2016 as Ex.
PW1/7 (being admitted).
8. Copy of first running bill qua work order No. 514 passed on 14.9.2015 as Mark X1.
9. Copy of first running bill qua work order No. 136 passed on 29.7.2016 as Mark X2.
10. Copy of second and final bill qua work order No. 136 passed on 12.7.2018 as Mark X3.
11. Copy of second and final bill qua work order No. 409 passed on 12.7.2018 as Mark X4.
12. Copy of second and final bill qua work order No. 410 passed on 12.7.2018 as Mark X5.
13. Copy of second and final bill qua work order No. 457 passed on 31.7.2018 as Mark X6.
14. Copy of 10CA bill qua work order No. 145 passed on 25.8.2017 as Mark X7.
15. Copy of 10CA bill qua work order No. 136 passed on 12.7.2018 as Mark X8.
10. Plaintiff has also examined Sh. Vikash (JSA), MCD, as PW2, who is a summoned witness and proved the summoned record i.e. attested CS (Comm) No. 1236/24 Page No. 6 of 31 Rajeev Mittal Vs. The Commissioner, NDMC copies of work order no. 457 dt. 07.01.2015, 514 dt. 31.03.2015, 145 dt. 10.03.2016, 410 dt. 02.01.2015, 409 dt. 02.01.2015 & 136 dt. 26.02.2016 as Ex. PW2/1 to Ex. PW2/6 respectively. He also proved the attested copy of 1st running bill, final bill and measurement book in respect of work order no. 457 as Ex. PW2/7 to Ex. PW2/9 respectively. He also proved the attested copy of 1st running bill, final bill and measurement book in respect of work order no. 514, as Ex. PW2/10 to Ex. PW2/12 respectively. He also proved the attested copy of 1 st running bill, final bill and 10CA bill in respect of work order no. 145, as Ex. PW2/13 to Ex. PW2/15 respectively. He also proved the attested copy of 1 st running bill, final bill and measurement book in respect of work order no. 410, as Ex. PW2/16 to Ex. PW2/18 respectively. He also proved the attested copy of 1st running bill, final bill and measurement book in respect of work order no. 409, as Ex. PW2/19 to Ex. PW2/21 respectively. He also proved the attested copy of 1st running bill, final bill, 10CA bill and measurement book in respect of work order no. 136, as Ex. PW2/22 to Ex. PW2/25 respectively.
11. On the other hand, in order to deny the claim of plaintiff, defendant has examined Sh. H.R. Meena, Assistant Engineer (M-I), Keshav Puram Zone as DW1 who led his evidence by way of affidavit Ex. DW1/A.
12. Final arguments heard from Sh. Sanjay Rathi & Sh. Sanchit Jaglan, Ld. Counsel for plaintiff and Sh. Sanjeet Malik, Ld. Counsel for the defendant.
13. I have considered the arguments and have gone through the CS (Comm) No. 1236/24 Page No. 7 of 31 Rajeev Mittal Vs. The Commissioner, NDMC record. My issue wise findings are as follows : -
ISSUE NO. 1 : "Whether the suit is barred by limitation? OPD.
And ISSUE NO.2 : "Whether the plaintiff has not submitted the bills, if so what effect ? OPD"
14. First of all I will decide both the issue together. In order to prove the same the plaintiff has examined himself as PW1 and led his evidence by way of affidavit Ex. PW1/A and proved the copy of work order No. 514 dated 31.3.2015 as Ex. PW1/2, Copy of work order No. 136 dated 26.2.2016 as Ex. PW1/3, Copy of work order No. 409 dated 2.1.2015 as Ex. PW1/4, Copy of work order No. 410 dated 2.1.2015 as and copy of work order No. 145 dated 10.3.2016 as Ex. PW1/7.
15. PW2 Vikas, who is official of MCD/defendant, in his testimony has proved the the work orders & bills as Ex. PW2/1 to Ex. PW2/25 respectively.
16. From perusal of plaint it is evident that plaintiff in his plaint has not made any averment that he submitted any bill of no.514, 409,410, 457 and 136 and 145 and further from testimony of plaintiff / PW1 also it is evident that he has stated in his testimony that he submitted either running or final qua aforesaid work order no. to the defendant corporation. Neither he produce any ruuning or final bill qua aforesaid work order no.514, 409,410, 457 and 136 and 145.
17. PW1 in his cross examination has also admitted that he has not submitted any bill to MCD and vol. stated that MCD itself prepared the CS (Comm) No. 1236/24 Page No. 8 of 31 Rajeev Mittal Vs. The Commissioner, NDMC bill and same were accepted by him. Whereas from the documents proved by PW2 also it is evident he only produce the bills of aforesaid work order which is suo moto prepared by the defendant.
18. The DW1 in his evidence has stated that purported bill prepared by the defendant are internal notings and do not constitute bill. In his cross examination also no suggestion has been given that plaintiff submitted bill to the defendant, therefore without going into issue whether the bills suo moto prepared by defendant is internal noting or are bills, I held that plaintiff has not submitted the bill therefore I decide the issue no2 against the defendant.
19. Now coming to the issue no.1 work orders No. 514, 136 & 145 are time barred. As per WS since work of work order no. order no. 514 was completed in March 2015, and of work order no. 145 in march 2016, and work order no. 136 in February 2016 however suit is filed on 30.06.2020 therefore suit is file beyond the prescribed limit of three year hence suit is barred by limitation.
20. The initial onus is upon the plaintiff to prove that it has filed the suit within the prescribed period of limitation. Since plaintiff has filed the suit for recovery of amount for the work done therefore as per entry 18 of Schedule of the Limitation Act, 1963, period is three years from the date when the work is done where no time has been fixed for payment of work.
21. It is undisputed fact the GCC govern the terms and condition of work awarded to the plaintiff by defendant. Clause 7 and 9 deals with payment of bills. Clause 7 of the GCC which deals with interim/ or running bill is reproduced as under :-
CS (Comm) No. 1236/24 Page No. 9 of 31Rajeev Mittal Vs. The Commissioner, NDMC "CLAUSE 7 Payment on Intermediate Certificate to be Regarded as Advances:
No payment shall be made for work estimated to cost Rs. Twenty thousand or less till after the whole of the work shall have been completed and certificate of completion given. For works estimated to cost over Rs. twenty thou- sand, 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 contrac- tor shall not be the entitled to be paid any such interim pay- ment if the gross work done together with the note payment/adjustment of advances of material collected, if any, since the last such payment is less then the amount specified in Schedule âFâ 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 ar- range 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 pre- pare 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 ac- count of admissible shall be made by the Engineer-in- Charge certifying the sum to which the contractor is consid- ered entitled by the way of interim payment at such rates as decided by the Engineer-in-Charge. The amount admissible shall be paid by the 30th working day after the day of presen- tation of the bill by the contractor to the Engineer-in-Charge of his Asst. Engineer together with the account of the mate- rial is issued by the department, or dismantled materials, if any. The payment of passed bills will be subject to availabil- ity of funds in particular head of account from time to time in MCD. Payment of bills shall be made strictly on Queue basis the i.e. first the past liabilities will be cleared and after that the release of payment for passed bills be in order of the demand received at HQ under particular head of accounts.CS (Comm) No. 1236/24 Page No. 10 of 31
Rajeev Mittal Vs. The Commissioner, NDMC No interest shall be payable to the contractor in case of de- lay in payment on account of non-availability of fund in the particular head of account of the MCD.
All such payment shall be regarded as payments by way of advances against final payment only and shall not preclude the requiring of bad, unsound and imperfect or unskilled work to be rejected, removed, taken away and reconstructed or re-erected. Any certificate given by the Engineer-in- Charge relating to the work done or materials delivered forming part of such payment, may be modified or corrected by any subsequent such certificates(s) or by the final certifi- cate and shall not by itself be conclusive evidence that any work or materials to which it relates is/are in accordance with the contract and specifications. Any such interim pay- ment or any part thereof shall not it any respect conclude, determine or effect in any way powers of Engineer-in- Charge under the contract or any of such payments be treated as final settlement and adjustment of accounts or in any way vary or effect the contract.
Pending consideration of extension of date of completion interim payments shall to be made as herein provides, with- out prejudice to the right of the departments to take action under the terms of this contract for delay in the completion of work, if the extension of date of completion is not granted by the competent authority.
The Engineer-in-Charge in his sole discretion on the ba- sis of a certificate from the Asstt. Engineer to the effect that the work has been completed upto the level in question make interim advance payments without detailed measure- ments for work done (other than foundations, items to be covered under finishing items) upon lintel level (including sunshade etc.) and slab level, for each floor working out at 75% of the assessed value. The advance payment so allowed shall be adjusted in the subsequent interim bill by taking de- tailed measurements thereof".CS (Comm) No. 1236/24 Page No. 11 of 31
Rajeev Mittal Vs. The Commissioner, NDMC
22. Clause 9 of GCC deals with final bill which is reproduce as below:
"CLAUSE-9 The final bill shall be submitted by the contractor in the same manner as specified in interim bills within three months of physical completion of the work or within one month of the date of the final certificate of completion furnished by the Engineer-in-Charge whichever is earlier. No further claims shall be made by the contractor after submission of the final bill and these shall be deemed to have been waived and extinguished. Payment of those items of the bill in respect of which there is no dispute and of items in dispute, for quantities and rates as ap- proved by Engineer-in-Charge, will, as far as possible be made after the period specified hereinunder the period being reckoned from the date of receipt of bill by the En- gineer-in-Charge or his authorised Asstt. Engineer, complete with account of material issued by the depart- ment and dismantled. The payment of passed bills will depend on availability of funds in particular head of ac- count from time to time in MCD. Payment of bills shall be made strictly on Queue basis i.e. first the past liabil- ity 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.
1. If the tendered value of work is upto Rs. 5 lacs: 6 months
2. If the tendered value of work exceeds Rs. 5 lacs: 9 months"CS (Comm) No. 1236/24 Page No. 12 of 31
Rajeev Mittal Vs. The Commissioner, NDMC
23. As evident from clause 7 of GCC it is evident that it deals with payment of running bill and provides that where the works estimated to cost over Rs. 20,000 the interim or running account bills shall be submitted by the contractor on or before the date of every month of the fixed for the same by the Engineer-in-Charge. (iii) and in that event payment is to be made within 30 th working days after the day by presentation of the bill by the contractor to the Engineer-in-Charge after days of submission of running bill.
24. Further as per clause-9 of GCC which is produced in WS, the final bill is to be submitted by the contractor within 3 months of completion of work or within one month of the date of the final certificate of completion furnished by the Engineer-in-Charge whichever is earlier. Further, this clause provides that payment is to be made within 6 months if the tendered value of work is of Rs. 5 lakhs or if the tendered value of work exceeds Rs. 5 lakhs the payment is to be made within 9 months, therefore, in my view, limitation would commence 6 months from the date of preparation of work where the amount is upto Rs. 5 Lakh and 9 month where it is more than Rs. 5 lakh. Therefore, same will be merged in final bill & limitation period for running bill would also commence from the date when limitation of final bill would commence.
25. Now reverting back to the case, plaintiff in his entire plaint or in the testimony of PW1 has not deposed that it submitted any bill nor it has filed both running and final bill. Plaintiff has only relied upon both running & final bills proved by PW2 which had been prepared by the defendant suo moto, therefore, in my view, period of limitation for each bill would commence from the date of preparation of the bill by the CS (Comm) No. 1236/24 Page No. 13 of 31 Rajeev Mittal Vs. The Commissioner, NDMC defendant and it would be 9 months if the bill amount is more than Rs. 5 lakhs otherwise it would be 6 months.
26. I am not agree with the contention of Ld. Counsel for plaintiff that since aforesaid bill was suo moto prepared by the defendant therefore same cannot be considered as bill submitted by plaintiff or same are just internal noting, therefore limitation period is to be counted from the date of completion of work and not from the date of preparation of bill by defendant.
27. As evident from clause 7 GCC even if running bill is not submitted by contractor the Engineer in Charge can suo moto prepared the bill, whereas according to clause 9 GCC as reproduce above, the final bill cannot be prepared the defendant official I am not agree with the said contention in view of amended clause 9 of GCC which was amended vide circular no. D/EE(P)-111/2024-25/260 dt. 04.11.2024 , now final bill also can be prepared by Engineer in Charge can prepare the bill suo moto as in case of running bill. Amended GCC is is reproduce as blow:
CLAUSE 9 Payment of final bill The final bill shall be submitted by the contractor in the same manner as specified in interim bills within three months of physical completion of the work or within one month of the date of the final certificate of completion furnished by the Engineer-in-Charge whichever is earlier.
In the event of the failure of the contractor to submit the final bill within prescribed time, payment on account of amount admissible shall be made by the Engineer-in-Charge certifying the sum to which the contractor is considered entitled by way of final payment at such rates as decided by the Engineer-in-Charge. No further CS (Comm) No. 1236/24 Page No. 14 of 31 Rajeev Mittal Vs. The Commissioner, NDMC claims made by the contractor after submission of the final bill shall be entertained and these shall be deemed to have been waived and extinguished.
Payments of those items of the bill in respect of which there is no dispute and for those items in dispute on account of quantities and/or rates shall be paid at approved quantity and /or rates by the Engineer-in-Charge, within three months period reckoned from the date of receipt of the bill by the Engineer-in-Charge or his authorized Assistant Engineer, A complete with account of materials issued by the Department and dismantled materials.
28. From perusal of work order no. 514 Ex. PW1/2 it is evident that it is dated 31.03.2015 and time for completion is 3 months. Hence work was completed on 31.06.2015. On perusal of first running bill of work order no. 514 EXPW2/10 it is evident that it is dated 03.07.2015 for an amount of Rs. 5,70,962/-, which was prepared on 14.09.2015 for an amount of Rs. 4,33213/- after deducting Rs. 4500/- as withheld amount & Rs. 92749/- as statutory deducted and its final bill EXPW2/11 is dated 15.04.2017 and same was prepared on 25.08.2017 for an amount of Rs. 13613/-, therefore, period of limitation would commence from the date of preparation of final bill dt. 25.08.2017 + 9 months as the amount of bill is more than Rs. 5 lakhs, hence, period of limitation qua bill no. 514 would commence from 25.05.2018 and expire on 24.05.2021, whereas the present suit has been filed on 01.07.2020 thus the said bill is within the period of limitation.
29. On perusal of work order no. 409 dt. 02.01.2015 and its first running bill EXPW2/19 is dated 09.03.2015 for an amount of Rs. 5,72,209/-, which was prepared on 08.05.2015 for an amount of Rs. 4,40,018/- after deducting Rs. 45000/- as withheld amount & Rs. 87191/-
CS (Comm) No. 1236/24 Page No. 15 of 31Rajeev Mittal Vs. The Commissioner, NDMC as statutory deducted and its final bill EXPW2/20 was prepared on 12.07.2018 for an amount of Rs. 24,365/-, therefore, in my view, the amount of running bill would merge into final bill if same is not paid by the defendant and period of limitation would commence from the date of preparation of final bill dt. 12.07.2018 + 9 months as the amount of bill is more than Rs. 5 lakhs, hence, period of limitation qua bill no. 409 would commence from 12.04.2019 and expire on 11.04.2022 whereas the present suit has been filed on 01.07.2020 thus the said bill is within the period of limitation.
30. On perusal of work order no. 136 dt. 26.02.2016 and its first running bill EX PW2/22 is dated 06.06.2016 for an amount of Rs. 12,18,000/-, which was prepared on 29.07.2016 for an amount of Rs. 9,53,870/- after deducting Rs. 9000/- as withheld amount & Rs. 174130/- as statutory deducted and its final bill EXPW2/23 was prepared on 12.07.2018 for an amount of Rs. 86400/-, therefore, in my view, the amount of running bill would merge into final bill if same is not paid by the defendant and period of limitation would commence from the date of preparation of final bill dt. 12.07.2018 + 9 months as the amount of bill is more than Rs. 5 lakhs, hence, period of limitation qua bill no. 136 would commence from 12.04.2019 and expire on 11.04.2022 whereas the present suit has been filed on 01.07.2020 thus the said bill is within the period of limitation.
31. On perusal of work order no. 410 dt. 02.01.2015 and its first running bill EXPW2/16 is dated 26.03.2015 for an amount of Rs. 7,35,471/-, which was prepared on 31.03.2015 for an amount of Rs. 5,43,338/- after deducting Rs. 70000/- as withheld amount & Rs. 122133/-
CS (Comm) No. 1236/24 Page No. 16 of 31Rajeev Mittal Vs. The Commissioner, NDMC as statutory deducted and its final bill EXPW2/17 was prepared on 25.07.2017 for an amount of Rs. 70,000/-, therefore, in my view, the amount of running bill would merge into final bill if same is not paid by the defendant and period of limitation would commence from the date of preparation of final bill dt. 25.07.2017 + 9 months as the amount of bill is more than Rs. 5 lakhs, hence, period of limitation qua bill no. 410 would commence from 25.04.2018 and expire on 24.04.2021 whereas the present suit has been filed on 01.07.2020 thus the said bill is within the period of limitation.
32. On perusal of work order no. 457 dt. 07.01.2015 and its first running bill EX PW2/7 is dated 26.07.2015 for an amount of Rs. 8,13,208/-, which was prepared on 31.03.2015 for an amount of Rs. 622378/- after deducting Rs. 65000/- as withheld amount & Rs. 125830/- as statutory deducted and its final bill EXPW2/8 was prepared on 31.07.2018 for an amount of Rs. 56,660/-, therefore, in my view, the amount of running bill would merge into final bill if same is not paid by the defendant and period of limitation would commence from the date of preparation of final bill dt. 31.07.2018 + 9 months as the amount of bill is more than Rs. 5 lakhs, hence, period of limitation qua bill no. 457 would commence from 30.04.2019 and expire on 29.04.2022 whereas the present suit has been filed on 01.07.2020 thus the said bill is within the period of limitation.
33. On perusal of work order no. 145 dt. 10.03.2016 and its first running bill EXPW2/13 is dated 31.05.2016 for an amount of Rs. 7,27,968/-, which was prepared on 15.06.2016 for an amount of Rs. 578013/- after deducting Rs. 50000/- as withheld amount & Rs. 99955/- as CS (Comm) No. 1236/24 Page No. 17 of 31 Rajeev Mittal Vs. The Commissioner, NDMC statutory deducted and its final bill EXPW2/14 was prepared on 25.08.2017 for an amount of Rs. 50,000/-, therefore, in my view, the amount of running bill would merge into final bill if same is not paid by the defendant and period of limitation would commence from the date of preparation of final bill dt. 25.08.2017 + 9 months as the amount of bill is more than Rs. 5 lakhs, hence, period of limitation qua bill no. 409 would commence from 25.05.2019 and expire on 24.05.2022 whereas the present suit has been filed on 01.07.2020 thus the said bill is within the period of limitation. Hence I hold that in view of amended clause 9 of GCC which allowed the Engineer in charge to prepare the final bill suo moto therefore limitation period would count from the date 6 or 9 months after final bill was prepared by defendant plus 6 or 9 month and not from six or nine month from the date of completion of work.
34. In view of the above discussion I held that the suit of the plaintiff is within the period of limitation and also hold that plaintiff has not submitted both the final and running bill. Issue no. 1 &2 is decided accordingly.
ISSUE NO. 3 : "Whether the plaintiff has not complied with the clause-45 of GCC, if so what effect ? OPD
35. Clause 45 of GCC provides that security amount is to be released after labour clearance which is reproduced as below:
CLAUSE 45 Release of Security deposit after labour clearance :
Security Deposit of the work shall not be refunded till the contractor produces a clearance certificate from the Labour Officer. As soon as the work is virtually complete the contractor shall apply for the clearance CS (Comm) No. 1236/24 Page No. 18 of 31 Rajeev Mittal Vs. The Commissioner, NDMC certificate to the Labour Officer under intimate on to the Engineer-in- Charge. The Engineer- in-Charge on receipt of the said communication, shall write to the Labour Officer to intimate if any complaint is pending against the contractor in respect of the work. If complaint is pending on record till after 3 months after completion of the work and/or no communication is received from the Labour Officer to this effect till six months after the date of completion it will be deemed to have received the clearance certificate and the security Deposit will be released if otherwise due."
59. Clauses 17 and 45 relating to security deposits have also been interpreted in the Circular dated 10th June 2014, as under:
"Clause 17:- The security deposit shall not be refunded before expiry of one year from the date of completion of work. Clause 45:- Security deposit shall not be refunded till the contractor produces clearance certificate from the Labour Officer."
36. In North Delhi Municipal Corporation Vs Sanjeev Kumar RFA No. 430/2017 dt. 22.03.2018 Hon,ble High Court dealt with the issue of refund of security amount. Relevant para is reproduce as below:
Question No.2 - Refund of Security deposit
58. In respect of each work order, the Contractors have to deposit 10% as the security deposit at the initial stage. Upon the payment of the final bill and after issuance of labour clearance certificate, the security deposit is liable to be refunded. The Contractors have, in some of the appeals included the security deposit amount in the principal amount claimed and in some other cases the refund of security deposit has been sought for separately. In either case, there is no doubt that the security deposit is liable to be refunded after the submission of the documents, certificates from the Labour Officer. Clause 17 and Clause 45 relating to refund of security deposit reads as under:
"CLAUSE 17 Contractor liable for damages, defects during maintenance period :
If the contractor or his working people or servants shall break, deface, injure or destroy any part of building in which they may be working, or any building, road, road kerb, fence, enclosure, water pipe, cables, drains, electric or telephone post or wires, trees, grass or grassland, or cultivated ground contiguous to the premises on which the work or any part is being executed, or if any damage shall happen to the work while in progress, from any cause whatever or if any defect, shrinkage or other faults appears in the work within twelve months (six months in the case of CS (Comm) No. 1236/24 Page No. 19 of 31 Rajeev Mittal Vs. The Commissioner, NDMC work costing Rs.5.00 lacs and below except road work) after a certificate final or otherwise of its completion shall have been given by the Engineer-in- Charge as aforesaid arising out of defect or improper materials or workmanship the contract shall upon receipt of a notice in writing on that behalf make the same good at his own expense or in default the Engineer-in-Charge cause the same to be made good by other workmen and deduct the expense from any sums that may be due or at any time thereafter may become due to the contractor, or from his security deposit or the proceeds of sale thereof or of a sufficient portion thereof. The security deposit of the contractor shall not be refunded before the expiry of twelve months (six months in the case of work costing Rs.5.00 lacs except dense carpet works) after the issue of the certificate final or otherwise, of completion of work or till the final bill has been prepared and passed whichever is later. In case of dense carpet works the Security Deposit of the contractor shall not be refunded before the expiry of 5 & 7 years of maintenance from last day of the month in which a particular road is completed in case of binder of penetration 60/70 grade & CRMB 60 binders respectively.
CLAUSE 45 Release of Security deposit after labour clearance : Security Deposit of the work shall not be refunded till the contractor produces a clearance certificate from the Labour Officer. As soon as the work is virtually complete the contractor shall apply for the clearance certificate to the Labour Officer under intimate on to the Engineer-in- Charge. The Engineer- in-Charge on receipt of the said communication, shall write to the Labour Officer to intimate if any complaint is pending against the contractor in respect of the work. If complaint is pending on record till after 3 months after completion of the work and/or no communication is received from the Labour Officer to this effect till six months after the date of completion it will be deemed to have received the clearance certificate and the security Deposit will be released if otherwise due."
59. Clauses 17 and 45 relating to security deposits have also been interpreted in the Circular dated 10th June 2014, as under:
"Clause 17:- The security deposit shall not be refunded before expiry of one year from the date of completion of work. Clause 45:- Security deposit shall not be refunded till the contractor produces clearance certificate from the Labour Officer."
60. A perusal of all the aforementioned Clauses reveals that:
a) For refund of security deposit, a clearance certificate is needed from the Labour Officer;
b) Once the work is completed, the Contractor would apply for the clearance certificate under intimation to the Engineer-in-Charge;
c) The Engineer-in-Charge has to communicate to the Labour Officer if there is any complaint in respect of the work executed;
d) If after completion of the work, 3 months have elapsed and no communication is received, after date of completion, there is a deemed CS (Comm) No. 1236/24 Page No. 20 of 31 Rajeev Mittal Vs. The Commissioner, NDMC clearance certificate and the security deposit is liable to be released.
61. Thus, irrespective of the date of payment of the principal amount, the security deposit cannot be held back beyond a period of 6 months from the date when application is made to the Labour Officer for issuance of the clearance certificate. These Clauses do not brook any delay in so far as the refund of the security deposit is concerned. Moreover, there is no clarity whatsoever as to how the refund of Security deposit is subject to the queue system and availability of funds. The Clause itself does not contemplate any such condition. Thus, the security deposit is liable to be refunded upon the compliance of the conditions in Clauses 17 and 45 of the General Conditions of Contract.
37. From the aforesaid judgment it is evident that plaintiff only need to apply for labour clearance certificate and intimate the Engineer Incharge about the same and if no communication is received for three month it amount to deemed sanction and security amount is to be released.
38. PW1 in his examination in chief has not deposed that he submitted the Labour clearance certificate. In his cross examination he categorically admitted that he has not submitted labour clearance certificate. PW1/ plaintiff even has not deposed that he applied for labour clearance certificate much less which is the minimum requirement for release of security amount. Hence I hold that plaintiff has not complied the clause 45 of GCC by submitting the labour clearance certificate and even has failed to proved that he has applied for labour clearance certificate thus he is not entitled to release of security amount. Hence issue no.3 is decided against the plaintiff.
Issue No. 4 : "Whether the plaintiff is entitled to recover principal amount of Rs. 20,33,466/- ? OPP
39. The plaintiff has given the details of the bills which are pending. Detail of which is under:
CS (Comm) No. 1236/24 Page No. 21 of 31Rajeev Mittal Vs. The Commissioner, NDMC Sr. Work Order No. Date Gross (In Date of bill Interest No. Rs.) passing thereon upto 28.06.2020
1. 514 31.03.2015 5,25,962 14.09.2015 Rs. 3,02,603/-
2. 514 31.03.2015 45,000 25.08.2017 Rs. 15,375/-
3. 136 26.02.2016 11,28,000 29.07.2016 Rs. 5,30,160/-
4. 136 26.02.2016 90,000 12.07.2018 Rs. 21,240/-
5. 409 26.02.2016 45,000 12.07.2018 Rs. 10,620/-
6. 410 02.01.2015 70,000 12.07.2018 Rs. 16,520/-
7. 457 02.01.2015 65,000 31.07.2018 Rs. 14,950/-
8. 145 07.01.2015 51,343 25.08.2017 Rs. 17,510/-
9. 136 10.03.2016 13,161 12.07.2018 Rs. 3,105/-
Total 20,33,466/- Rs. 9,32,083/-
However, in his examination in chief led by way of affidavit EXPW1/A he depose that the payment qua the following work orders, except work order no. 145, have been made :-CS (Comm) No. 1236/24 Page No. 22 of 31
Rajeev Mittal Vs. The Commissioner, NDMC Hence, from the evidence affidavit of PW1 it is evident plaintiff has already received the payment of the all the bills except work order no.145, therefore, this Court has to only decide whether the plaintiff is entitled to recover payment of the work order no. 145.
40. DW1 in his cross examination has admitted that payment of all the work orders except 10CA bill qua work order No. 145 has been made to the plaintiff. He also admitted that amount of said work order has been sanction and he also admitted that plaintiff is entitled to the amount of 10CA of work order no. 145, therefore, I held that an amount of Rs. 51343 is due against the defendant qua the said work order.
41. Now the question whether the plaintiff is legally entitled to receive the said amount or not.
42. It is contended by Ld. Counsel for plaintiff that since suit is filed without pre- institute mediation therefore plaintiff has not complied the provision of section 12A of Commercial Court Act therefore suit is liable to be dismissed.
43. From the plaint it is evident that plaintiff has filed the present suit as an ordinary suit on 01.10.2021 and same was transferred to this Court in pursuance of the order dated 15.07.2014 passed by Hon'ble Delhi High Court in CM(M) No. 1504/2023, title Rajeev Mittal Vs. The Commissioner, NDMC and while transferring the suit to this Court Hon'ble High Court has categorically mentioned in para-10 that the transfer of the suit does not, in any manner, affect the right of the defendant to contend that the suit has been filed without any cause of action or is otherwise barred by any provision of law or is liable to be CS (Comm) No. 1236/24 Page No. 23 of 31 Rajeev Mittal Vs. The Commissioner, NDMC dismissed under Order VII Rule 11 CPC for any other reason, including for the failure of the plaintiff to initiate pre-suit mediation as mandated under Section 12 of the Act. Section 12A of The Commercial Courts Act, 2015 provides that any commercial matter the party needs to approach for pre-institution mediation before taking any proceedings. Section 12A is reproduced as under :-
12A. Pre-Institution Mediation and Settlement.-- (1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government. (2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation. (3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987 (39 of 1987), the Authority authorised by the Central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1):
Provided that the period of mediation may be extended for a further period of two months with the consent of the parties: Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for the purpose of limitation under the Limitation Act, 1963 (36 of 1963).
(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.
(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-
section (4) of section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996).]
44. In the judgment of M/S. PATIL AUTOMATION PRIVATE LIMITED AND ORS. versus RAKHEJA ENGINEERS PRIVATE LIMITED, 12022 LiveLaw (SC) 678, Hon'ble Apex Court has held that pre-institution mediation is mandatory. The Relevant para is as under:
CS (Comm) No. 1236/24 Page No. 24 of 31Rajeev Mittal Vs. The Commissioner, NDMC "84. Having regard to all these circumstances, we would dispose of the matters in the following manner. We declare that Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11. This power can be exercised even suo moto by the court as explained earlier in the judgment. We, however, make this declaration effective from 20.08.2022 so that concerned stakeholders become sufficiently informed. Still further, we however direct that in case plaints have been already rejected and no steps have been taken within the period of limitation, the matter cannot be reopened on the basis of this declaration. Still further, if the order of rejection of the plaint has been acted upon by filing a fresh suit, the declaration of prospective effect will not avail the plaintiff. Finally, if the plaint is filed violating Section 12A after the jurisdictional High Court has declared Section 12A mandatory also, the plaintiff will not be entitled to the relief.
45. Hence, from the said judgment it is evident that Hon'ble Supreme Court has made the compliance of pre-institution mediation as provided in Section 12A of The Commercial Courts Act, 2015 from 20.08.2022. Since the present suit has been filed before 20.08.2022, therefore, the plaint is not liable to be rejected due to non-compliance of the Section 12A of The Commercial Courts Act, 2015.
46. As stated above, the defense of the defendant that the suit is barred by limitation or that the plaintiff is not entitled to recover amount as he has not submitted the bill, therefore, not entitled to bill amount are not tenable, therefore, in my view, the plaintiff is entitled to recover all the bill amounts qua aforesaid work orders, if the bill amount has not been paid by the defendant. Further, DW1 also in his testimony has admitted that department in the process in respect of work order no. 514, 409, 410 and 457 and 136 and during final arguments, defendant has filed the status report of making payment as per which payment qua work order no. 514, CS (Comm) No. 1236/24 Page No. 25 of 31 Rajeev Mittal Vs. The Commissioner, NDMC gross amount of running bill is Rs. 5,25,962/- & date of passing bill is 14.09.2015, out of which net amount of Rs. 4,33,213 has been released on 04.05.2023 and gross amount of final bill is Rs. 45,000/- & date of passing the final bill is 25.08.2017, out of which net amount of Rs. 13,613/- has been released on 01.03.2024. Further, the payment qua work order no. 136, the gross amount of 1st running bill is Rs. 11,28,000/- & date of passing is 29.07.2016, out of which net amount of Rs. 9,53,870/- has been released on 14.08.2023 and gross amount of 2nd running bill is Rs. 90,000/- & date of passing is 12.07.2018, out of which net amount of Rs. 86,400/- has been released on 21.03.2024 and gross amount of final bill is 13,161/- & date of passing is 12.07.2018, out of which net amount of Rs.12,838/- has been released on 21.03.2024. Further, the payment qua work order no. 409 the gross amount is Rs. 45,000/- & date of passing the said bill is 12.07.2019, out of which net amount Rs. 24,365/- has been released on 21.03.2024. Further, the payment qua work order no. 410 the gross amount is Rs. 70,000/- & date of passing is 12.07.2018, out of which net amount of Rs. 62,060/- has been released on 21.03.2024. Further the payment qua work order no. 457 the gross amount is Rs. 65,000/- & date of passing is 31.07.2018, out of which net amount of Rs. 56,660/- has been released on 19.04.2024. Further, the payment qua work order no. 145 the gross amount is Rs. 51,343/- and net amount is Rs. 50,000/-, which is pending. Hence, it is evident that the defendant at the stage of final arguments by filing status report has confirmed the averment of the plaintiff it has paid amount of all the bills except work order no. 145 and net amount is Rs. 50,000/-, therefore, the plaintiff is entitled to the said amount from the defendant.
CS (Comm) No. 1236/24 Page No. 26 of 31Rajeev Mittal Vs. The Commissioner, NDMC ISSUES NO. 5 & 6 :
"Whether the plaintiff is entitled to interest on the said amount, if so, at what rate and for which period ? OPP"
And "Whether plaintiff is entitled to pendentelite and future interest, if so, at what rate
47. The plaintiff has claimed interest on the due amount. I am not agree with the contention of learned counsel for the defendant that plaintiff will not be entitle to interest for delayed period on the ground that there is a condition in clause 9 that if fund is not available in particular head in which work was awarded and payment will be made qua vise.
48. As far as another contention of Ld. Counsel for defendant that since plaintiff has not submitted the running bill and final bill therefore as per clause 7 & 9 of GCC he is not entitled to interest. As stated above defendant by amending clause 9 of GCC the defendant has permitted its Engineer in charge to prepare the final bill suo moto as it was permitted for preparing running bill in clause-7 of GCC. In my view only difference between a case where contractor has file running or final bill with defendant and where contractor not file the same, would be that plaintiff would be entitle to interest on running bill after 30 days of submission of running bill and further he will be entitle to interest after 6 month or 9 month from the date of submission of final bill whereas in case defendant prepared the running bill or final bill suo moto then he will be entitle to interest on both running and final bill after 6 month or 9 months from the date of preparation of final bill.
CS (Comm) No. 1236/24 Page No. 27 of 31Rajeev Mittal Vs. The Commissioner, NDMC
49. I am so not agree with the contention of Ld. Counsel for defendant that since clause 9 of GCC was amended after work was awarded to plaintiff therefore same is not applicable in case of plaintiff and thus he is not entitle to interest as he has not submitted bill and thus violated clause 7 & 9 of pre amended GCC. In my view, once defendant choose to amend the GCC permitting Engineer In Charge to prepare the final bill suo moto it being beneficial provision would apply retrospectively.
50. In view of above discussion I held that plaintiff will be entitled to interest @ 7% per annum after 6 month from the date of preparation final bill where amount of both running and final bill against a work order is upto 5 lakh otherwise after 9 month of preparation of final bill. Now I will discuss how much interest plaintiff is entitle work order wise as under :-
(a) Work Order No. 514 : The net amount of first running bill is Rs.
4,33,213/- and final bill is Rs. 13,613/- & date of passing final bill is 25.08.2017, hence, the total both running and final bill Rs. 446826 [Rs. 4,33,213 + Rs. 13,613] is less than Rs. 5 lakhs, therefore, the plaintiff will be entitled to interest @ 7% per annum after 6 months from the date of preparation of final bill dt. 25.08.2017 i.e. from 25.02.2018 till 04.05.2023 for an amount of Rs. 4,33,213 and from 25.02.2018 till 01.03.2024 for an amount of Rs. 13,613/-,which comes to Rs. 163156 [Rs. 157426 + Rs. 5730/-].
(b) Work Order No. 136 : The net amount of 1st running bill is Rs. 9,53,870/-, 2nd running bill is Rs. 86,400 and final bill is Rs. 12,838/- & date of passing final bill is 12.07.2018, hence, the total of 1st & 2nd running and final bill Rs. 1053108 CS (Comm) No. 1236/24 Page No. 28 of 31 Rajeev Mittal Vs. The Commissioner, NDMC [953870+86400+12838] is more than Rs. 5 lakhs, therefore, the plaintiff will be entitled to interest @ 7% per annum after 9 months from the date of preparation of final bill dt. 12.07.2018 i.e. from 12.04.2019 till 14.08.2023 for an amount of Rs. 9,53,870/-, from 12.04.2019 till 21.03.2024 for an amount of Rs. 86,400/- & from 12.04.2019 till 21.03.2024 for an amount of Rs. 12,838/-, which comes to Rs. 318467[Rs. 284142+Rs.29885+Rs.4440 ].
(c) Work Order No. 409 : The net amount of first / final bill is Rs. 24,365/- & date of passing is 12.07.2018, hence, the amount of said bill Rs. 24,365 is less than Rs. 5 lakhs, therefore, the plaintiff will be entitled to interest @ 7% per annum after 6 months from the date of preparation of bill dt. 12.07.2018 i.e. from 12.01.2019 till 21.03.2024, which comes to Rs. 8854/-.
(d) Work Order No. 410 : The net amount of first / final bill is Rs. 62,060/- & date of passing is 12.07.2018, hence, the amount of said bill Rs. 62,060/- is less than Rs. 5 lakhs, therefore, the plaintiff will be entitled to interest @ 7% per annum after 6 months from the date of preparation of bill dt. 12.07.2018 i.e. from 12.01.2019 till 21.03.2024, which comes to Rs. 22552/-.
(e) Work Order No. 457 : The net amount of first / final bill is Rs. 56,660/- & date of passing is 31.07.2018, hence, the amount of said bill Rs. 56,660/- is less than Rs. 5 lakhs, therefore, the plaintiff will be entitled to interest @ 7% per annum after 6 months from the date of preparation of bill dt. 31.07.2018 i.e. from 31.01.2019 till 19.04.2024, which comes to Rs. 20698/-.
CS (Comm) No. 1236/24 Page No. 29 of 31Rajeev Mittal Vs. The Commissioner, NDMC
38. Hence, the plaintiff is entitled to total interest qua the aforesaid work orders Rs. 533727/-
[163156+318467+8854+22552+20698]. Further, the plaintiff will be entitled to interest @ 10% p.a. on the said amount if said amount is not paid within 3 months from the date of decree till its realization.
(f) Work Order No. 145 : Admittedly, since net amount of Rs. 50,000/- qua the said work order has not been paid by defendant therefore plaintiff will be entitle to interest @ 7% per annum after 6 months from the date of preparation of bill dt. 25.08.2017 i.e. from 25.02.2018 till filing of the suit i.e. 01.07.2020, which comes to Rs. 8224/- and thereafter plaintiff will be entitle interest @ 10% from the date of filing of suit till the date of decree and thereafter till its realization. Issue No. 5 & 6 are decided accordingly.
RELIEF
51. (a) In view of finding of above issues, I pass a decree of Rs. 58,224/- [Rupees Fifty Eight Thousand Two Hundred and Twenty Four only] in favour of plaintiff and against the defendant qua the work order no. 145 alongwith interest @ 10 % per annum from the date of filing of suit till the date of decree and thereafter till its realization.
(b) Further, I pass a decree of Rs. 533727/- (Rupees Five Lakh Thirty Three Thousand Seven Hundred and Twenty Seven only) in favour of plaintiff and against the defendant, qua the remaining work orders. Further if the said amount is not made within the period of three months from the date of decree, the defendant shall be liable to pay the same CS (Comm) No. 1236/24 Page No. 30 of 31 Rajeev Mittal Vs. The Commissioner, NDMC @10% p.a, from the date of decree till the date of payment of aforesaid amount.
Plaintiff will also be entitled to proportionate cost of the suit. Decree be prepared accordingly.
File be consigned to the Record Room. SANJEEV
Digitally signed
by SANJEEV
KUMAR
KUMAR AGGARWAL
AGGARWAL Date: 2025.01.25
17:17:38 +0530
Announced in the open court (Sanjeev Kumar Aggarwal)
on 25.01.2025 DJ (Commercial)-01, Central,
THC/Delhi
CS (Comm) No. 1236/24 Page No. 31 of 31
Rajeev Mittal Vs. The Commissioner, NDMC