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Delhi District Court

Abhishek Enterprises vs Municipal Corporation Of Delhi on 18 October, 2025

     IN THE COURT OF MS SAVITA RAO, DISTRICT JUDGE
             COMMERCIAL COURT-01, SOUTH,
                 SAKET COURTS, DELHI


CS (Comm) No. : 571/2024
DLST010152772024




In the matter of :-

Abhishek Enterprises
A Registered Partnership Firm
Through its Partner Shri Abhishek Goel
8, Netaji Subhash Marg, Daryaganj,
New Delhi - 110002
                                 ............Plaintiff

Vs.

Municipal Corporation of Delhi
Through its Commissioner
Dr. Shyama Prasad Mukherjee Civic Centre
Minto Road, New Delhi - 110002

                                     ..............Defendant

Date of institution of the petition : 20.12.2024
Date of arguments                   : 22.09.2025 & 13.10.2025
Date of Order                       : 18.10.2025


                            JUDGEMENT

1. This is suit for recovery of Rs. 18,78,090/- (Rs. Eighteen Lacs Seventy Eight Thousand and Ninety only) alongwith interest, filed by plaintiff against the defendant.

2. Plaintiff, as stated, was registered as Class I Contractor with the defendant. Plaintiff was awarded a work contract by defendant for " Reconstruction/raising of boundary wall with M.S. Grill and concertina coil fencing at SDMC Primary School, K-II Block, Sangam Vihar in Ward No. 77-S, South Zone" vide work order No. EE Project South-I/SYS/2019-20/2026 for the contractual amount of Rs. 73,95,550/-. Said assigned work was completed by plaintiff in all respect to the satisfaction of the defendant.

3. On 29.07.2021, First RA Bill was passed for net amount of Rs. 63,15,510/- after deduction towards security deposit, taxes etc. However, the payment was not made to plaintiff despite repeated requests by the partner of plaintiff firm. Legal notice dated 14.03.2024 was sent by plaintiff to the defendant demanding payment of Rs. 71,04,159/- with interest @ 9% p.a., after which, on 31.03.2024, plaintiff was paid Rs. 63,15,510/- i.e. the amount due under the bill. However, the amount of interest for delay in making the payment, as well as security deposit and withheld amount, aggregating to Rs. 18,78,090/- was not paid to the plaintiff, despite repeated requests.

4. Plaintiff filed application before DLSA, South, Delhi in terms of Section 12 A of the Commercial Courts Act, 2015, for Pre- Institution Mediation wherein defendant failed to appear. Therefore, the proceedings were closed by issuing 'Non-Starter' Report dated 02.08.2024. Hence, plaintiff was constrained to file instant suit.

5. In written statement filed on behalf of defendant, award of work order in favour of plaintiff was admitted. However, it was stated that the said work was required to be commenced from 08.01.2020 and the date of completion of the said work order was CS (Comm) No. : 571/2024 2/10 07.07.2020. But the work was started on 21.01.2020 and was completed on 16.01.2021 with delay. In view of the above, plaintiff was called upon to apply for extension of time as per Clause 5 of General Conditions of Contract for MCD works/CPWD Manual. After getting the approval of extension of time from the competent authority, the final bill may be prepared and payment may be released with regard to the same. Letters dated 14.02.2025 and 24.03.2025 were also written to the plaintiff in this regard but no response to the said letters have been received by the department till date.

6. It was further submitted that as per the terms and conditions of the work order dated 08.01.2020, plaintiff was bound to follow the general conditions of the contract for SDMC/MCD work and as per clause 5 of the said general conditions, plaintiff was bound to apply for extension of completion of work order with the competent authority, failing which competent authority shall forfeit the performance guarantee. It was further stated that despite repeated requests, plaintiff had not sought extension for completion of work. Though running bills of plaintiff were cleared by department, however, the payment claimed i.e. Rs. 50,000/- and Rs. 7,38,649/- were not released to plaintiff due to non compliance of Clause 5 of the General Conditions of Contract.

7. Application under Order XIII-A read with section 151 CPC for Summary Judgment, thereafter was filed on behalf of plaintiff with submission that the work awarded to the plaintiff in January 2020 was to be completed within six months. After award of work order, due to spread of Covid-19 and imposition of lockdown, work was delayed which was within the knowledge of CS (Comm) No. : 571/2024 3/10 the defendant and beyond the control of the plaintiff. It was further stated that no letter had been issued with regard to alleged delay or for imposition of liquidated damages. Defendant was well aware that there was no requirement for seeking extension of time for the work in question.

8. It was stated that since defendant has no real prospect of defending plaintiff's claim in as much as defendant has admitted its liability of not having paid the amount due to the plaintiff, no oral evidence is required to be led in the case in view of the categorical admission of the defendant. Plaintiff is, therefore, entitled for decree of recovery against the defendant for the following amount:

i) Interest amount of Rs. 10,89,441/- on 1st RA Bill for Rs. 63,15,510/- from 28th April, 2022 till 31st March 2024.

ii) Rs. 50,000/- of withheld amount and Rs. 7,38,649/- of security deposit.

9. Reply to the application was filed on record wherein contents of written statement were reiterated. It was stated that since plaintiff failed to apply for extension of time and filed the present suit without any cause of action in its favour, therefore, after receipt of the summons of the present suit, defendant wrote two letters to the plaintiff asking him to seek the extension of time so that official formalities be completed and the requisite due amount may be released to him. However, despite receipt of the said letters, plaintiff had not applied for extension of time as required under the terms and conditions of work order, hence the application is liable to be dismissed with cost.

10. Grounds for summary judgment - " The Court may give summary judgment against plaintiff or defendant on a claim if it CS (Comm) No. : 571/2024 4/10 considers that :-

(a) the plaintiff has no real prospect of succeeding on the claim or defendant has no real prospect of successfully defending the claim, as the case may be; and

(b) there is no other compelling reason why the claim should not be disposed off before recording of oral evidence".

11. In A to E Interior Products Pvt. Ltd. Vs. Rahul Bhandari and Ors. CS (COMM) No. 555/2021, following was noted:

16. In the Commercial Suit, while Order XII Rule 6 CPC has been made applicable, Order XIII A Rule 3 CPC titled 'Summary Judgments' has been incorporated. The Legislative intent behind introducing summary judgment under Order XIIIA of CPC is to provide a remedy independent, separate and distinct from judgment on admissions and summary judgment under Order XXXVII of CPC. It empowers the Court to give Summary Judgment against the plaintiff or the defendant on a claim it considers that the plaintiff has no real prospects of succeeding in the claim or the defendant has no real prospect of successfully defending the claim, as the case may be and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence".

12. In Su-Kam Power Systems Ltd. vs Mr. Kunwer Sachdev & Anr. on 30 October, 2019AIRONLINE 2019 DEL 1695, (2019) 264 DLT 326, following was noted:

" 39. The Commercial Courts Act, 2015 has been enacted with the intent to improve efficiency and reduce delay in disposal of commercial cases. The relevant portion of the Statement of Objects and Reasons of the Commercial Courts Act, 2015 is reproduced hereinbelow:-

―to have a streamlined procedure which is to be adopted for the conduct of cases in the Commercial Courts and in the Commercial Divisions by amending the Code of Civil Procedure 1908, so as to improve the efficiency and reduce delays in disposal of commercial cases. The proposed case management system and provisions for summary judgment will enable disposal of commercial disputes in a time bound manner.‖ (emphasis supplied)

40. Amended Order XIIIA of CPC, as applicable to commercial disputes, enables the Court to decide a claim or part thereof without recording oral evidence. Order XIIIA of CPC seeks to avoid the long drawn process of leading oral evidence in certain eventualities. Consequently, the CS (Comm) No. : 571/2024 5/10 said provision enables disposal of commercial disputes in a time bound manner and promotes the object of the Commercial Courts Act, 2015.

41. Rule 3 of Order XIII-A of CPC empowers the Court to grant a summary judgment against a defendant where on an application filed in that regard, the Court considers that the defendant has no real prospect of successfully defending a claim, and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence"

49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra).

52. Consequently, this Court is of the opinion that there will be no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result".

13. During the course of pendency of proceedings also, it was submitted by Ld. counsel for defendant that the payment sought by the plaintiff is not disputed, however, the amount is payable subject to furnishing the letter of extension of time by plaintiff, which had been communicated to the plaintiff on 14.02.2025. Per contra, Ld. Counsel for plaintiff submitted that after the award of work order, due to spread of covid-19, lockdown was imposed in the country which continued from 23rd March till June 2020. Thereafter, there was partial lifting of lock down. Due to imposition of lockdown, many labourers left for their villages and there was shortage of labour force in the city. It was only in August 2020 that some of the labourers reported back for work. As further stated, the imposition of lockdown during Covid-19 has also been judicially recognized in various judgments of CS (Comm) No. : 571/2024 6/10 Hon'ble Courts. On account of imposition of lock down which was partially lifted, the execution of work was delayed, which was beyond the control of the plaintiff. Furthermore, on account of ban on construction activity imposed by Delhi Government in the month of November and December 2020, the work could not be completed in time.

14. Award of work order in favour of plaintiff as well as completion of work by plaintiff is not disputed on record. Once defendant admitted the bill, acknowledged the work, approved the payment, released the payment to the plaintiff and did not raise any question with regard to not applying for extension of time by plaintiff, it is not open for the defendant to raise the highly belated plea after filing of the suit by plaintiff, for release of security deposit and withheld amount. So much so, that the quantum of the claim by the plaintiff i.e. Rs. 50,000/- and Rs. 7,38,649/- is also not disputed.

15. It may be noted that defendant issued two notices upon the plaintiff dated 14.2.2025 and 24.3.2025 calling upon him to apply for extension of time as per Clause 5 of General Conditions of contract so that department may finalize his work for release of withheld amount as well as security amount. No such notice had been issued upon the plaintiff prior to filing of the suit .

16. Ld. Counsel for plaintiff submitted that no letter much less any notice was written by the defendant with regard to alleged delay or any notice as to why liquidated damages be not imposed. The defendant was well aware of the ground realities and had accepted the execution of work unconditionally. Defendant was well aware that there was no requirement for seeking of extension of time for the work in question. It is also CS (Comm) No. : 571/2024 7/10 not the case of defendant that any letter was written from 2021 till January 2025 by defendant to the plaintiff stating that it had to apply for Extension of Time. Defendant after being served with summons of the suit, had issued the letter dated 14.02.2025 . If there was any requirement for applying for EOT, defendant would have issued a notice or a letter to the plaintiff asking it to apply for EOT. Thereafter, letter dated 24.3.2025 had been issued after the defendant entered appearance in the present suit with the plea that plaintiff had to apply for extension of time, which stand of defendant has no legs to stand in view of the above factual position. Thus, reliance placed on letters dated 14.02.2025 and 24.03.2025 by defendant has no legal sanctity as the same have been issued after service of summons of present suit.

17. In terms of own contention of defendant running bills of plaintiff were cleared by the defendant, however the payment of Rs. 50,000/- and Rs. 7,38,649/- were not released in favour of plaintiff, which as contended, was due to non compliance of clause 5 of General Conditions of Contract. At the cost of repetition, it may be noted that the work has been completed by plaintiff, defendant has cleared the payment of the bills except for the withheld amount and the security amount. There is no complaint pertaining to quality of work performed by plaintiff justifying withholding of any amount. Mere paper work to fill the files of the defendant and the mere formality to apply for the ex-post facto extension when the work has already been completed, is not only sheer wastage of time but also is flimsy , unfair and unreasonable stand of the defendant.

18. Defendant has failed to show any triable defence and merely bald, baseless and to the extent of useless allegations have CS (Comm) No. : 571/2024 8/10 been levelled to deny the justified claim of the plaintiff. It is apparent that the defendant has no real prospect of succeeding in the defence that the amount was not paid to plaintiff for want of letter seeking extension for the work which had been completed way back in 2021. Plea taken on behalf of defendant is not sustainable and rather is depreciated.

19. Plaintiff has also claimed interest on the amount of bill w.e.f. April 2022 till 31.03.2024, amounting to Rs. 10,89,441/-. In North Delhi Municipal Corporation Vs. Gautam Anand, 2018 SCC Online Del 8044, it was noted by Hon'ble High Court that reasonable time for making payment in respect of work orders upto Rs. 5,00,000/- shall be six months and for work orders exceeding Rs. 5,00,000/- shall be nine months from the date when the bill is passed by the Engineer-In-Charge. It was further noted that this outer limit of six months and nine months cannot be exceeded and non-payment of bills within said period would attract payment of interest for delayed periods.

20. In the instant matter, defendant has acknowledged and admitted liability towards the bill passed and also made payment of the bill on 31.03.2024. Since the amount in the work order is more than Rs. 5 lacs, following the ratio of the judgments (Supra), defendants had time of nine months to pay amount without any interest but no payment had been made within that period. Thus, the plaintiff cannot be deprived of the interest amount for the period i.e. beyond the expiry of 9 months till the time payment was/is cleared. Application under Order XIII-A Rule III r/w section 151 CPC accordingly stands allowed. Suit is decreed with cost in favour of plaintiff and against the defendant , as follows:

(i) Defendant is directed to clear the withheld amount of Rs. 50,000/- and security deposit of Rs. 7,38,649/-

(ii) Defendant is further directed to pay interest @ 9% per annum on the bill amount after the expiry of nine months period of passing of bill till the date of payment.

21. Decree sheet be prepared accordingly. File be consigned to Digitally record room. signed by savita savita rao Date:

                                        rao      2025.10.18
                                                 13:13:27
                                                 +0530

Announced in the open               (SAVITA RAO)
court on this 18th day            DISTRICT JUDGE
of October 2025                (COMMERCIAL COURT)-01
                             (SOUTH) SAKET COURTS,DELHI




CS (Comm) No. : 571/2024                                      10/10