Delhi District Court
Abhishek Enterprises vs Commissioner, Ndmc on 14 October, 2024
DLCT010037392021
IN THE COURT OF SH. SANJEEV KUMAR AGGARWAL : DISTRICT
JUDGE (COMMERCIAL) -01 : CENTRAL, TIS HAZARI COURTS,
DELHI
CS (Com.) No. 870/2021
M/s. Abhishek Enterprises,
Engineers, Private & Government Contractors,
Having its Registered office at :
8, Netaji Subhash Marg, Daryaganj,
New Delhi - 110002. ..... Plaintiff.
Versus
1. Commissioner,
Municipal Corporation of Delhi
4th Floor, Civic Center,
Minto Road, New Delhi.
2. The Executive Engineer (Project),
Karol Bagh Zone,
Under Zakhira Flyover,
Municipal Corporation of Delhi,
New Delhi. .... Defendants.
SUIT FOR RECOVERY OF RS. 78,64,691/-.
Suit (Com.) No. 870/2021 Page No. 1 of 15
M/s. Abhishek Enterprises Vs. Commissioner, MCD
Date of institution : 09.03.2021
Date of reserving Judgment : 12.08.2024
Date of decision : 14.10.2024
JUDGMENT
1. Vide this Judgment, I shall decide the present suit filed by the plaintiff under Order 37 CPC against the defendants for recovery of amount of Rs. 78,64,691/- alongwith interest.
2. Brief facts as stated in the plaint are that plaintiff is a partnership firm engaged in the business of construction and is registered as class 1 contractor with the defendant and the plaintiff firm is being run by Sh. Abhishek Goel who is the son of one of the partner and the present suit is being filed by him by virtue of power of attorney dated 23.2.2021.
3. It is further stated that sometime in the year 2016, the defendant No. 2 invited sealed percentage / item rate tender for the "improvement of road by providing (pdg.) readymix concrete (RMC) at Y- 121 to police booth in Loha Mandi, Naraina Industrial Area Phase-II, Ward No. 150/KBZ" vide NIT No. 02/01. The plaintiff was found lowest bidder hence defendant No. 2 issued a work order to the plaintiff on 15.7.2016 for completion of work vide work order No. EE Project Karol Bagh / SYS / 2016-2017/1 ( herein after called as contract) and the work was completed by the plaintiff within the stipulated period of three months i.e. on 14.10.2016 and after completion of work, the site was handed over to the defendants and an inspection was carried out by the defendants and the work done by plaintiff was found to be satisfactory by the defendant officials and thereafter a formal agreement dated 2.12.2016 was executed between the parties pertaining to the works.
Suit (Com.) No. 870/2021 Page No. 2 of 15M/s. Abhishek Enterprises Vs. Commissioner, MCD
4. It is further stated that the total bill prepared by the defendants was for amount of Rs. 65,10,990/- which includes an amount of Rs. 58,71,786/- towards first running bill dated 30.11.2016 and an amount of Rs. 6,39,204/- towards the final bill dated 31.8.2018 and after deducting the statutory payments, an amount of Rs. 56,03,706/- was due and payable by the defendants to the plaintiff and further defendants are also liable to pay amount of Rs. 4,00,379/- and Rs. 63,920/- which was deposited as security with the defendants.
5. It is further stated that the amount of first running bill for an amount of Rs. 50,60,382/- was recorded on 30.11.2016 and the date of passing of second and final bill for an amount of Rs. 5,43,324/- was recorded as on 31.8.2017 but the defendant has paid only Rs. 10 lacs and amount of Rs. 50,68,005/- is still due and the defendants are also liable to pay Rs. 1,86,800/- which was deposited as earnest money by the plaintiff.
6. It is further stated that the defendant No. 2 after acknowledging the liability of defendants had raised a demand No. 25 EE (Pr)/KBZ/16-17 dated 23.12.2016 to the head office of defendants seeking funds for making payment of the first running bill of the plaintiff and defendant No. 2 once again acknowledged their liability and raised demand No. 12 dated 21.12.2019 to the head office of the defendants but the amount was not paid by the defendants. Hence, plaintiff issued notice dated 1.4.2019 under Section 478 of the DMC Act claiming an amount of Rs. 67,47,150/-as on 1.4.2019 under the following heads along with pendente lite and future interest @ 12% per annum w.e.f. 1.4.2019 till the date of realization under the following heads :-
Particulars Amount (Rs.)
a. Towards outstanding amount 52,54,805/-
(50,68,005 + 1,86,800).
b. Interest @ 12% on the aforesaid 14,71,345/-
amount from the date of passing of the
Suit (Com.) No. 870/2021 Page No. 3 of 15
M/s. Abhishek Enterprises Vs. Commissioner, MCD bill i.e. 15.10.2016 till the date of issuance of the statutory notice.
c. Towards costs of notice. 21,000/-
Total 67,47,150/-
7. It is also stated that despite service of notice, the defendant did not pay the amount hence the plaintiff initiated provisions of Pre Institution Mediation but despite service of notice, defendant did not participate and non starter report was issued on 18.12.2020 however due to covid 19 and shortage of staff, the report was issued to the plaintiff on 19.1.2021. It is further stated that the defendant did not pay the amount hence the present suit is filed claiming amount of Rs. 78,64,691/- along with pendetelite and future interest @ 12% per annum.
8. Summons were issued to the defendants under Order 37 CPC and defendants filed appearance after which plaintiff filed summons for Judgment and thereafter the defendant filed application for leave to defend and vide order dated 13.2.2023 the leave to defend was allowed thereafter the defendant filed written statement.
9. In the written statement, the defendants have taken the preliminary objection that the plaintiff did not furnish the correct and complete details regarding existence of plaintiff partnership firm and did not disclose whether so called partnership firm is still in existence nor any document pertaining to the partnership firm has been filed by the plaintiff.
10. It is further stated that the plaintiff deliberately chose not to file documents of partnership firm with the plaint as it would prove that no such partnership firm was constituted at the time of filing of the present suit to say that the partnership firm consisted of Ms. Nirmal Goel and Sh. Sunil Goel was ceased to exist on 31.3.2017 by virtue of deed of Suit (Com.) No. 870/2021 Page No. 4 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD retirement whereas the present suit was filed in the name of so called partners. It is further stated that the partnership firm with the same name between Abhishek Goel and Sunil Goel becomes new entity vide partnership deed dated 6.4.2017 and has no right to seek any payment from the defendants as no contract was awarded to the said new constituted firm. Further objection was taken that as per clause 9, the contractor to submit the final bill within three months on completion of work whereas the plaintiff completed the work on 14.10.2016 and submitted the final bill on 31.8.2017 i.e. after delay of 7 months and further objection was taken that it is clear contract between plaintiff and defendants that the payment of bills be made on availability of funds from time to time by defendant corporation.
11. On merits, the defendants have denied the contents of plaint. It is denied that the plaintiff has deposited amount of Rs. 1,86,800/- as earnest money and is stated that the earnest money was Rs. 1,76,130/- as per the work order. Further it is denied that the total bill was prepared by the defendant for an amount of Rs. 65,10,990/- and it is stated that the plaintiff has submitted first bill of Rs. 58,71,786/- out of which Rs. 8,11,404/- was deducted against security amount, income tax, VAT and labour cess which comes to Rs. 50,60,382/- out of which Rs. 95,880/- was deducted against statutory deductions which comes to Rs. 5,43,324/-. It is further stated that the defendants have paid amount of Rs. 10 lacs as part payment. Further it is stated that the plaintiff is not entitled to recovery of suit amount and therefore it is prayed that the present suit may be dismissed.
12. 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. Further, it is stated that initially the partnership firm consists of Ms. Nirmal Goel however on 6.4.2017, Sh. Abhishek Goel was inducted as a partner in place of Ms. Nirmal Goel. It is further stated that the firm has the same name, same bank account i.e. account Suit (Com.) No. 870/2021 Page No. 5 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD bearing No. 02121011000969 in Oriental Bank of Commerce which is merged into Punjab National Bank, same PAN card bearing No. AABFA3411C which was issued to the plaintiff firm on 23.11.1993. It is further stated that the defendant has made part payment of Rs. 10 lacs in the aforesaid account of plaintiff firm. It is further stated that on the day of filing of the suit, plaintiff partnership firm comprised of two partners namely Sh. Sunil Goel and Sh. Abhishek Goel and being partner of the firm, Sh. Abhishek Goel was duly competent to file the present suit on behalf of the firm.
13. Admission / denial of documents were also done by both the parties.
14. After completion of the pleadings, following issues were framed for consideration on 3.2.2024 :-
1. Whether the partnership firm Abhishek Enterprises which was granted contract by the defendant was ceased to exist on 31.3.2017? OPD.
2. Whether the plaintiff partnership firm has no locus standi to file the present suit? OPD.
3. Whether the plaintiff is entitled to recover the amount as claimed in the plaint after adjusting the amount which has already been paid by the defendant during pendency of the suit? OPP.
4. Whether the plaintiff is entitled to interest, if so, at what rate and for which period? OPP.
5. Relief.
15. In order to prove its case, the plaintiff has examined its partner Sh. Abhishek Goel as PW1 who led his evidence by way of affidavit Ex. PW1/A.
16. On the other hand, in order to deny the claim of plaintiff, Suit (Com.) No. 870/2021 Page No. 6 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD defendant has examined Sh. Ashwani Raina, Executive Engineer (Project), Karol Bagh Zone, MCD as DW1 who led his evidence by way of affidavit Ex. DW1/A.
17. Arguments heard from Sh. Aseem Mehrotra, Ld. Counsel for the plaintiff and Sh. Vinay Rathi, Ld. Counsel for the defendants.
18. it is argued by Ld. Counsel for plaintiff that during pendency of suit an amount of Rs. 41,77,817/- was paid by the defendant on 25.9.2023 and amount of Rs. 5,43,324/- was paid on 27.2.2024 and claim is only now left with respect to the interest i.e. 6 years 24 days on first running bill and 4 years 8 months and 26 days qua second bill and further for refund of earnest money and security amount.
19. It is further argued by Ld. Counsel for the plaintiff that this Court has dismissed the application u/o 6 rule 17 CPC by which plaintiff has sought amendment in plaint "and the plaintiff has filed appeal against the order dated 13.2.2023 bearing RFA (OS) No. 1/2021 vide which the plaintiff's application under Order 6 Rule 17 CPC to amend the plaint was dismissed and the said appeal was also dismissed.
20. It is further argued by Ld. Counsel for plaintiff that since during pendency of the suit, defendant has paid part amount to the same partnership firm consists of Abhishek Goel and Sunil Goel therefore the same amounts to acknowledgment of the current partnership firm which was awarded tendered hence now the issue of locus standi of the plaintiff has no more relevance.
21. Ld. Counsel for plaintiff further argued that as per clause 7 & 9 GCC the defendant was to made payment of bill amount in 9 months from the date of preparation of bill and since defendant has delayed in making payment of bill therefore plaintiff is entitle to interest for delayed period @18% per annum. In support of his contention he relied upon following Judgments :-
Suit (Com.) No. 870/2021 Page No. 7 of 15M/s. Abhishek Enterprises Vs. Commissioner, MCD i. Varinder Jeet Singh Vs. MCD & Anr., 2013 (134) DRJ 284;
ii. NDMC & Anr. Vs. Shish Pal, 2018 SCC Online Del 8039;
iii. NDMC & Anr. Vs. Deepak Kumar, RFA No. 318/2021 & CM Appl. No. 31717/2021; and iv. Rajnish Yadav Proprietor of M/s. Bharat Construction Co. Vs. The North Delhi Municipal Corporation, RFA (OS) (Com.) No. 1/2021.
22. On the other hand, Ld. Counsel for the defendant has argued that the defendant has not paid the part payment to the plaintiff firm but has deposited the said amount in the account of old partnership firm Abhishek Enterprises which is recorded in the MCD record as contractor and hence the defendant has not acknowledged that the firm which has filed the present suit is the same firm which was awarded contract by the defendant. Therefore, the plaintiff is not the firm which was awarded contract in question from the defendant therefore, plaintiff is not entitled to any amount.
23. It is further argued by Ld. Counsel for defendant that the plaintiff firm has failed to prove that same is a registered partnership firm and therefore the present suit filed by the plaintiff is barred under Section 69 (2) of the Partnership Act.
24. It is also argued by Ld. Counsel that the plaintiff is not entitled to interest as there is a condition in the agreement that the amount of bill will be paid only when the funds are available with the defendant and he further argued by Ld. Counsel for defendant that the plaintiff has not complied with the provisions of clause 17 of GCC therefore, plaintiff is not entitled for refund of security amount / earnest Suit (Com.) No. 870/2021 Page No. 8 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD money much less interest therefore the suit of the plaintiff is liable to be dismissed.
25. I have considered the arguments and have gone through the record. My issue wise findings are as follows : -
ISSUE NO. 1.
Whether the partnership firm Abhishek Enterprises which was granted contract by the defendant was ceased to exist on 31.3.2017? OPD.
AND ISSUE NO. 2.
Whether the plaintiff partnership firm has no locus standi to file the present suit? OPD.
26. Since both the issues are interconnected, I shall decide both the issues simultaneously. Admittedly the contract was awarded to the "Abhishek Enterprises". The onus is upon the plaintiff to prove that the plaintiff firm is the same firm to which the defendant has awarded contract in question.
27. In order to prove the same, plaintiff has examined Sh. Abhishek Goel as PW1 who in his testimony led through affidavit Ex. PW1/A has deposed that on 23.11.1993, a partnership deed was executed which consisted of two persons as partners namely Sh. Sunil Goel and Smt. Nirmal Goel. In the year 2016, the defendant No. 2 had invited tender for the "improvement of road by providing (pdg.) readymix concrete (RMC) at Y-121 to police booth in Loha Mandi, Naraina Industrial Area Phase-II, Ward No. 150/KBZ" vide NIT No. 02/01 which is Ex. P-1. He further deposed that on 15.7.2016, the plaintiff was awarded work by defendant No. 2 vide work order No. EE Project Karol Bagh / SYS / 2016-2017/1 which is Ex. P-2 and on 2.12.2016, an agreement was executed between the plaintiff and defendant No. 2 for execution of Suit (Com.) No. 870/2021 Page No. 9 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD work awarded to the plaintiff which is Ex. P-3.
28. In the cross examination of PW1, has admitted that he has not filed the partnership deed at the time of filing of the present suit. He also admitted that the work order was provided to the firm namely Abhishek Enterprises comprising of partners Sunil Goel and Nirmal Goel and also admitted that at the time of filing of the present suit, the said partners are not the partners of Abhishek Enterprises and voluntarily deposed that one of the partner namely Sh. Sunil Goel was being partner in M/s. Abhishek Enterprises. He also admitted that earlier partnership firm was ceased to exist from the date of retirement of one of the partner i.e. Smt. Nirmal Goel w.e.f. 6.4.2017 and on the same day, he became one of the partner of plaintiff firm. He denied the suggestion that the partnership firm with the name of Abhishek Goel and Sunil Goel becomes new entity w.e.f. 6.4.2017 having same firm name.
29. Though PW1 has deposed in his evidence affidavit Ex. PW1/A that Nirmal Goel retired as partner and a deed of retirement was prepared on 06.04.2017 and deponent / i.e. Abhishel Goel joined as partner w.ef. from 01.04.2017. As evident from replication filed by the plaintiff itself, when the contract in question was awarded to the firm Abhishek Enterprises, its partners were Sh. Sunil Goel and Smt. Nirmal Goel however on 6.4.2017, Smt. Nirmal Goel was retired and on the same day Sh. Abhishek Goel was inducted as partner in place of Smt. Nirmal Goel. Hence testimony of PW1 is contradictory to the replication regarding the date when PW1 was inducted as partner in Abhishek Enterprises. PW1 has not proved any document i.e. retirement deed of Nirmal or induction of PW1 as partner to corroborate the said fact. Though plaintiff has itself file the copy of partnership deed dt. 06.04.2017 which proved that Abhishek Goel and Sunil Goel constituted partnership with the name Abhishek Enterpises w.e.f 01.04.2017 file with partnership deed between Sunil Goel and Nirmal Goel dt. 23.11.1993 and retirement deed of Nirmal Goel dt. 06.04.2023 and registration Suit (Com.) No. 870/2021 Page No. 10 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD certificate/ Farm B issued by registrar of firm under Section 58 (1) & Farm A (registration of firm) issued under Section 59 (1) of Indian Partnership Act with respect to plaintiff firm file by the plaintiff itself on 07.08.2023, though not relied upon by the plaintiff during evidence. Said partnership deed prove that Nirmal Goel has retired from the firm on 31.03.2017 and not on 06.04.2017 and thus PW1 has deposed falsely with respect to the date of retirement of Nirmal Goel from Abhiskek Enterprises.
30. From the aforesaid facts it is evident that Nirmal Goel retired from Abhishek Enterprises on 31.03.2017 whereas Abhishek Goel joined as partner in Abhishek Enterprises on 01.04.2017 vide deed dt. 06.04.2017. Hence on 30.03.2017 only one partner i.e. Sunil Goel remain as partner. For a partnership firm to continue at least two partners are required. When partnership firm which consists of only two partners ceased to be exist on retirement of one of the partner and stands dissolved and remaining partner cannot induct a new partner. Therefore when Smt. Nirmal Goel retired from the partnership firm before inducting Abhishek Goel as partner, the said firm stands dissolved therefore Abhishek Enterprises which filed the present suit is not the same partnership firm which was awarded contract in question but a new Partnership firm with the same name.
31. The plaintiff Abhishek Enterprises is a new partnership firm formed only on 01.04.2017 is also evident from from registration certificate/ Farm B issued by registrar of firm under Section 58 (1) which proved that firm Abhishek Enterprises was registered in register of firm as no. 1525 of 2017 on 24.05.2017 & Farm A ( registration of firm ) issued u/s 59 (1) of Indian Partnership Act. It is worthwhile to mention the relevant section of Indian Partnership Act, 1932, which deal with the registration of partnership firm which are as under :-
"Section 58. Application for registration.--Suit (Com.) No. 870/2021 Page No. 11 of 15
M/s. Abhishek Enterprises Vs. Commissioner, MCD (1) The registration of a firm may be effected at any time by sending by post or delivering to the Registrar of the area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee, stating,--
(a) the firm name,
(b) the place or principal place of business of the firm,
(c) the names of any other places where the firm carries on business,
(d) the date when each partner joined the firm,
(e) the names in full and permanent addresses of the partners, and
(f) the duration of the firm. The statement shall be signed by all the partners, or by their agents specially authorised in this behalf.
Section 62. Noting of changes in names and addresses of partners.
When any partner in a registered firm alters his name or permanent address, an intimation of the alteration' shall be sent, within a period of 90 days from the date of making such alteration, by any partner or agent of the firm to the Registrar, who shall deal with it in the manner provided in section 61.
Section 63 Recording of changes in and dissolution of a firm.
(1) When a change occurs in the constitution of a registered firm, every incoming, continuing or outgoing partner, and when a registered firm is dissolved, every person who was a partner immediately before the dissolution, or the agent of every such partner or person specially authorised in this behalf shall, within a period of 90 days from the date of such change or dissolution, given notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall a record of the notice in the entry relating to the firm in the Registrar of Firms and shall file the notice along with statement relating to the firm filed under section
59. Suit (Com.) No. 870/2021 Page No. 12 of 15
M/s. Abhishek Enterprises Vs. Commissioner, MCD Section 68 Rules of evidence.
(1) Any statement, intimation or notice recorded or noted in Register of Firms shall, as against any person by whom or on whose behalf such statement, intimation or notice was signed, be conclusive proof of any fact therein stated.
(2) A certified copy of an entry relating to a firm in the Register of Firms may be produced in proof of the fact of the registration of such firm, and of the contents of any statement, intimation or notice recorded or noted therein.
32. From the aforesaid provision of Indian Partnership Act, 1932, it is evident that if it was only change of name of partners in firm by entering in record name of retiring partner would have been shown as deleted / retire and new partner's name would have been entered as partner with date of his joining firm, instead of mentioning name of both partner joining the firm as on 1.4.2021. From aforesaid form A & B issued under section 59(1) & 58 of Indian Partnership Act it is evident that, it is not issued for change of name of partner but same has been issued regarding registration of firm " Abhishek Enterprise" consist of only two partner Sunil Goel & Abhishek Goel who joined the said firm only on 01.04.2017 and registered on 24.5.2017 whereas admitted the earlier Abhishek Enterprises was admittedly formed in 1993. Hence as per registration document of plaintiff firm, same is not a continuing firm of Abhishek Enterprise but is a new firm formed on 1.4.2017.
33. I am also not agree with the contention of Ld. Counsel for plaintiff that both partnership firm i.e. "Abhishek Enterprises" which was awarded the contract in question and Abhishek Enterprises having Sunil Goel and Abhishek Goel as partner formed vide partnership deed dt. 06.04.2017 are one and same firm because of using the same name, same bank account number, GST number and PAN number as plaintiff has not led any evidence that it inform to those authorities that Nirmal Suit (Com.) No. 870/2021 Page No. 13 of 15 M/s. Abhishek Enterprises Vs. Commissioner, MCD Goel retired from the Abhishek Enterprises prior to Sunil Goel and Abhishek Goel entered into partnership on 01.04.2017 vide partnership deed dt. 06.04.2017 and believed version of plaintiff that it is same firm and only partners have been changed. Further these authorities are not legally competent to decide such a legal issue.
34. Further I am also not agree with the contention of Ld. Counsel for plaintiff that since during pendency of the suit plaintiff has made part payment of the work in question and only interest for delayed payment and security amount has remain balance thus defendant has acknowledge plaintiff firm as firm which was awarded contract and thus estopped from denying that plaintiff is not awarded contract. First of all no estopple is made out against the law. If plaintiff is a new firm form on 01.04.2017 then defendant even by making part payment of bill amount cannot confer its status that it is same firm which was awarded contract in year 2016 because said firm cease to exist after retirement of one of partner out of two partner and only work by remaining partner to recover or pay the past dues of said firm or for distribution of assets of said firm but cannot induct a new partner. Secondly I also find force in the contention of Ld. Counsel for plaintiff that since bank account number of the firm Abhishek Enterprises which was awarded work in question and they transferred the bill amount in the said bank account and were not aware that said bank account is adopted by plaintiff firm.
35. In view of aforesaid discussion I held that, plaintiff firm which consists of partners Abhiskek Goel and Sunil Goel is not the same partnership firm Abhiskek Enterprises which was awarded contract in question but it a new partnership firm. Hence, the plaintiff firm being not a firm which was awarded the contract has no locus standi to file the present suit. Hence, I decide both issues No. 1 and 2 against the plaintiff and in favour of the defendants.
Suit (Com.) No. 870/2021 Page No. 14 of 15M/s. Abhishek Enterprises Vs. Commissioner, MCD ISSUE NO. 3.
Whether the plaintiff is entitled to recover the amount as claimed in the plaint after adjusting the amount which has already been paid by the defendant during pendency of the suit? OPP.
AND ISSUE NO. 4 Whether the plaintiff is entitled to interest, if so, at what rate and for which period? OPP.
36. In view of my findings of issues No. 1 and 2, I held that the plaintiff is not entitled to recover any amount from the defendant much less interest on alleged delayed payment of bill, as it is not the firm which was awarded contract by defendant or had carried out the tender work and thus have no locus standi to file present suit.
RELIEF.
37. I view of my finding of aforesaid issues No. 1 to 4, since the plaintiff has no locus standi to file the present suit, I held that plaintiff is not entitled to receive any amount therefore suit is hereby dismissed with cost. Decree sheet be prepared accordingly. File be consign to record room.
Announced in the open court (Sanjeev Kumar Aggarwal)
on 14.10.2024 DJ (Commercial)-01, Central,
THC/Delhi / 14.10.2024.
Digitally signed
SANJEEV by SANJEEV
KUMAR
KUMAR AGGARWAL
AGGARWAL Date: 2024.10.14
15:56:59 +0530
Suit (Com.) No. 870/2021 Page No. 15 of 15