Delhi District Court
K.R. Builders Private Ltd vs Delhi Development Authority on 21 May, 2009
IN THE COURT OF Dr. KAMINI LAU: ADDL.
DISTRICT JUDGE13: CENTRAL DISTRICT:
DELHI
CS 214/2004
K.R. Builders Private Ltd.
1430, 1st Floor, Sector 16,
Faridabad121002
........... Plaintiff
VERSUS
1. Delhi Development Authority
Through Secretary
Vikas Sadan, INA,
New Delhi
2. Executive Engineer
Western Division No. 12,
Delhi Development Authority,
Lakkar Mandi, Kirti Nagar,
New Delhi50.
......... Defendants
Date of Institution: 6.9.2001
Arguments heard on: 21.4.2009
Date of Decision: 21.5.2009
: J U D G M E N T :
This suit for recovery of Rs.3,95,160.78 had
been filed by the plaintiff M/s. K.R. Builders (P) Ltd.
through its Managing Director K.R. Gupta against the
1
defendant DDA. Briefly the facts relevant to the disposal
of the same are as under:
BRIEF FACTS:
Plaintiff's Case:
The case of the plaintiff is that it is a Private Limited Company, duly incorporated under the Companies Act, 1956, and Shri K.R. Gupta, Managing Director is duly authorised to file the present suit, engage advocates, sign pleadings and take all such steps for the proper conduct of the case. It is stated that the defendants invited tenders for work of construction of 2693/2714 EWS and 358/376 LIG, incremental houses in Bindapur PocketIII, Dwarka Project SH: Construction of 202 EWS, 24 LIG incremental houses Pocket III at Bindapur, New Delhi pursuant to which the plaintiff submitted its tenders which was accepted and defendants awarded the work of construction of 202 EWS, 24 LIG incremental houses, PocketIII, at Bindapur, New Delhi to the plaintiff vide agreement no. 10/EE/WD 12/DDA/A/9192. According to the plaintiff, they 2 mobilised all material and labour to complete the aforesaid work of construction within the stipulated period but there were as usual delays on the part of the defendant and the work stood prolonged. It is pleaded that in view of the fact that the entire delay was on the part of the defendant, they also extended time upto the date of completion i.e. 15.1.94 without levy of any compensation and therefore, the work stood completed on 15th January, 94 and completion was recorded by defendant clearly pointing out themselves that the work was completed on 15.1.94 in all respects.
According to the plaintiff, the defendants were not able to allot flats and handover the possession to the allotees, and therefore, the last part of finishing i.e. final coat of white wash, paint, fixing of fittings and glasses, paints etc. generally required to be done at the time of handing over of physical possession to respective allottees, was done at that time. The plaintiff, therefore, completed the entire work and also continued its watch and ward at the site and as and when flats were allotted, the plaintiff would in each flat carry out the aforesaid last finishing 3 work so that possession could be handed over to the allottees. The defendant DDA recorded the same also in the completion certificate and clearly stating that these finishing items were not got executed from the plaintiff at the time of recording of completion on 15.1.94 since DDA Housing Authority was not releasing the allotment / possession letter due to non availability of civic amenities like water and electricity in Bindapur area. It is further stated that despite the fact that the plaintiff had completed the entire work, they did not let the plaintiff remove its watch and ward at the site and for the said purpose also, entered into supplementary agreement dated 11.1.2000 in this regard which was valid for a period of one year and to be extended further if required. For the purpose of the said supplementary agreement, the defendant also took two bank guarantees from plaintiff for a total sum of Rs.1,33,000/ being bank guarantee no. 6/2000 and 8/2000 of Punjab and Sind Bank, Green Park Branch, New Delhi. It is further stated that though the period of supplementary agreement expired on 10.1.2001 but defendant was still not 4 able to allot all the flats and only 50 number of flats have been allotted and watch & ward of the plaintiff was still continuing at the site on the date of filing of the suit which supplementary agreement dated 11.1.2000 has also not been further extended and has since expired. It is stated that despite the said supplementary agreement having been executed, the defendants have not paid to plaintiff for watch and ward as per terms of the said supplementary agreement and had made the plaintiff company to keep watch and ward. It is stated that though the work was completed on 15.1.94 in all respects except the one covered under the Supplementary Agreement which is the final coat of paint, white wash etc. which defendants did not let the plaintiff do till the flat was allotted and at the time of handing over of possession of the flat to the allottee, this final work of paint, white wash, etc. was got done, huge amounts of plaintiff are outstanding towards work done, balance payment under clause 10CC amounts wrongfully and illegally withheld due to various reasons, payments towards watch & ward, and return of the Bank 5 Guarantee since the work is complete and the supplementary agreement has already lapsed and the maintenance period also lapsed on 15.7.1994.
According to the plaintiff, the defendants refunded the security deposit of the plaintiff in December, 1999 and paid the provisional final bill on 27.3.98 but still the final bill and the following amounts have not been paid by defendants to plaintiff Company:
Sr. No. Head Amount (Rs.) A. On account of balance amount 21889.58 due and payable against the rates of extra items and Deductions item paid less/ deducted excess arbitrarily by the Department.
B. On account of balance amount 10,594.78p due and payable for escalation under Clause 10CC of the agreement.
C. Amount withheld unlawfully for 10500 the issue of locks by department and locks have been handed over to the defendants/ affixed at the site D. Amount still unlawfully withheld 85000 on account of pending allotment of remaining Flats 6 Sr. No. Head Amount (Rs.) E. Less payment under Clause 10 52696 CC as per bills submitted by plaintiff on 5.6.2000 vide reference no. KRB/BP/DDA/99 2000/569 F. On account of less payment 15400 towards watch & ward of completed works for the period 26.9.97 to 26.11.97 @ Rs. 7700/ per month.
G. On account of payment towards 69300 watch and ward of completed works paid less by defendant as per Circular no. 510 dated 21.5.1997 H. Towards watch & ward for the 1,12,200.00 period 16th March, 2000 upto the date of filing of the suit @ Rs.6600/ per month.
Total 3,72,793.19 The plaintiff is stated to have sent various requests to the defendants but to no effect and despite repeated reminders, the defendants failed to pay the aforesaid amount to plaintiff Company and plaintiff Company's watch & ward is still at the site. It is stated that since the defendants had failed to pay aforesaid amount to the plaintiff Company, they served a notice under Section 7 53B of the Delhi Development Act upon defendants through its Advocate on 30th May, 2001 calling upon the defendants to pay the aforesaid amounts to the plaintiff Company but despite the receipt of the said notice, the defendants have failed to pay the aforesaid amount to the plaintiff Company. It is stated that the defendants are liable to pay a total sum of Rs.3,72,793.19 to the plaintiff Company upto the date of filing of the suit and since the defendants have illegally and unlawfully withheld the aforesaid amount of the plaintiff Company and despite repeated reminders including legal notice dated 30th May, 2001, calling upon the defendants to pay the amount as well as interest thereupon, the defendants failed to pay the same, the defendants are liable to pay interest on the aforesaid amount @ 18% per annum which upto the date of the filing of the suit comes to Rs.22,367.59p. Therefore, the defendant is stated to be liable to pay a total sum of Rs.3,95,160.78p to the plaintiff company due to which reason the plaintiff has approached this court. 8 Defendant's Case:
In their written statement the defendants have raised a preliminary objection that the suit is barred by limitation in view of the provisions of Section 53B of DD Act, 1957 and the facts have not been properly stated in the plaint. It is stated that all the payments which were due to the plaintiff stood paid and no amount whatsoever is payable by the defendants to the plaintiff as alleged in the plaint. It is further stated that no cause of action whatso eve has arisen to the plaintiff for the filing of the present suit against the defendants and the suit is not maintainable for want of a legal, valid and proper notice under Section 53B of DD Act, 1957.
On merits, the defendant has admitted that the tenders were invited and the plaintiff submitted the tender for the construction of 202 EWS and 24 LIG incremental houses, Pocket III at Bindapur. It is also admitted that the tenders submitted by the plaintiff for the construction of 268 EWS and 24 LIG incremental houses, PocketIII, BlockB at Binda Pur, Delhi was accepted and the work 9 was awarded to the plaintiff. It is denied that there were any delays on the part of the Defendants or that any usual delays happen in such matters or that the work was prolonged because of any delays on the part of the defendants. It is admitted that the work was completed by the plaintiff on 15.1.94 and completion certificate was also recorded in this respect/subject to the items of final finishing to be provided at a later date. It is alleged that the entire work as per the terms and condition of tender/ agreement was not completed by the plaintiff by 15.1.94 as is apparent from the stipulations and contents of the Completion Certificate. It is also stated that when the work was completed by 15.1.94 by plaintiffs, as alleged in the plaint, there was no reason for them to continue with the watch and ward of the houses and in case any final touches were required to be given at the time of the allotment/ handing over of the flats then the watch and ward till such time was not required from the plaintiff. It is stated that the plaintiff and the defendants had to act in accordance with the terms and condition of the NIT and the agreement 10 executed between the parties and when the work stood completed as per the Agreement, the defendants could not authorize the plaintiffs to continue with the watch and ward. It is pleaded that the work as per the plaintiff itself was completed on 15.1.94 and Supplementary Agreement is stated to have been executed on 11.1.2000 i.e after the lapse of 6 years and the alleged Bank Guarantees did not create any additional liability on the defendants since the work, as per the original Agreement had to be completed by the plaintiffs on the rate as agreed to. It is also stated that the plaintiff can not claim any additional amount other than those which were stipulated in the award of the work and in the Agreement originally executed for the tendered work and that the plaintiff cannot claim any additional amount in case the flats are allotted and handed over to the allottees with some delay.
It is further pleaded that all the payments which were due to the plaintiff have been made and no payment is due to the plaintiff on account of any extra items or on account of any deduction items paid less/ deducted excess. 11 It is stated that nothing is payable under clause 10(cc) nor any amount has been illegally withheld on account of locks. It is admitted that that Notice under Section 53B of the DD Act, 1957 was received but according to the defendants the same was not a proper, legal and valid notice in accordance with the provisions of law. ISSUES FRAMED:
On the basis of the pleading of the parties the Ld. Predecessor of this court has framed the following issues:
1. Whether the suit is not maintainable for want of a valid and legal notice under Section 53B of DD Act? (OPD)
2. Whether the suit is barred by limitation? (OPD)
3. Whether the suit has not been filed by a duly authorized person? (OPD)
4. Whether the plaintiff is entitled to the amount claimed in para 10 of the plaint? (OPP) 12
5. Whether the plaintiff is entitled to the interest? If so, at what rate and for what period? (OPP)
6. Relief.
EVIDENCE:
In order to prove its case the Managing Director of the plaintiff company K.R. Gupta has examined himself as his sole witness as PW1 and in his examination in chief by way of affidavit he has corroborated what has been earlier stated in the main plaint. He has placed on record the Board Resolution dated 30.4.1999 which is Ex.PW1/1; the Memorandum & Article and Association and Incorporation Certificate which are Ex.PW1/2 & Ex.PW1/3; the completion certificate issued by the defendant which is Ex.PW1/4; the agreement dated 11.1.2000 which is Ex.PW1/5; copy of the bank guarantee which is Ex.PW1/6; extensions of the two guarantees which are Ex.PW1/7; letter dated 20.4.2001 which is Ex.PW1/8 & Ex.PW1/9; letter on account of balance due 13 and payable for escalation under Clause 10 - CC of the agreement which is Ex.PW1/10; letters dated 3.3.2000 and 5.6.2000 which are Ex.PW1/11 & Ex.PW1/12; letter regarding less payment under Clause 10 CC as per bills submitted by the plaintiff on 5.6.2000 which is Ex.PW1/13; internal noting of DDA which is Ex.PW1/14;
circular dated 2.5.1997 which is Ex.PW1/14; legal notice dated 30.5.2001 which is Ex.PW1/16; office copy of the letter dated 25.8.2000 which is Ex.PW1/17; notice to produce documents served by the plaintiff upon defendant which is Ex.PW1/18; office copy bearing the receipt of letter dated 2.7.1999 which is Ex.PW1/19; letter dated 20.5.1996 which is Ex.PW1/20; completion certificate is Ex.PW1/21 and the proforma of supplementary agreement which is Ex.PW1/22.
In rebuttal the defendants have examined their Executive Engineer K.G. Allahabadi as DW1 who has in his examination in chief by way of affidavit corroborated what has been earlier stated in the written statement. 14 FINDINGS:
I have heard the arguments advanced before me by the counsels for both the parties and have gone through the records of the case. My findings on the various issues are as under:
Issue no. 1 Whether the suit is not maintainable for want of a valid and legal notice under Section 53B of DD Act?
Onus of proving this issue was upon the defendant DDA. In support of its case the defendants have examined their Executive Engineer K.G. Allabadi as its sole witness as DW1. He has in his examination in chief by way of affidavit has deposed that the suit of the plaintiff is not maintainable for want of a legal, valid and proper notice under Section 53B of the DD Act. Ld. Counsel Sh. S.D. Sharma appearing on behalf of the defendant has vehemently argued that the notice sent by the plaintiff under Section 53B of DD Act was not in accordance with law firstly because it was not addressed to the defendant 15 but to its Secretary; secondly it did not contain any date of cause of action for the purposes of filing the suit; thirdly the notice stated the alleged amounts payable to the plaintiff but did not provide any calculations for the same being due and lastly since the notice was deficient for the requisite details and for the legal requirement as provided under Section 53B of DD Act.
I have considered the submissions made before me. It is evident from the record that a notice under Section 53B of DD Act has been duly served upon the defendant. It is, however, argued that the notice so issued was in accordance with the requirement as provided under Section 53B of DD Act. I have perused the notice dated 30.5.2001 which is Ex.PW1/16 which has been duly exhibited by the plaintiff which has been addressed to the Secretary DDA copy of which has been sent to the Executive Engineer. Admittedly, Secretary is no authority under the Delhi Development Authority and the notice sent to the Secretary DDA is legally sustainable since the 16 provisions of Section 53B does not provide the authority to whom the notice has to be sent and only states that it has to be left in the office or place of abode of, the person to be sued. Merely because it has been addressed to the Secretary DDA would make no difference once it has been delivered to the office of the authority receipt of which notice has not been denied by the defendant.
Further, I have also gone through the contents of the said notice which shows that the plaintiff has exhaustively given the cause of action and the nature of relief sought alongwith the exact amount of compensation claimed which in the present case is to the tune of Rs.3,72,793.19p. Even in the crossexamination no suggestion has been given to PW1 to the extent that no legal notice has been sent to the defendant, rather the suggestion is that the notice is not in accordance with the provisions of Section 53 of DD Act. I, therefore, find no merit in the arguments raised by the defendant that the notice given by the plaintiff is not in accordance with the provisions of Section 53B of DD Act. Issue is decided in 17 favour of the plaintiff and against the defendant. Issue no. 2 Whether the suit is barred by limitation?
Onus of proving this issue was upon the defendant. The case of the defendant is that the suit of the plaintiff is beyond the period of limitation. The Ld. counsel for the defendant has vehemently argued that the present suit being related to contract comes within serial no. 18 under para 2 of the schedule attached to the Limitation Act and for the purpose of payments under this head, the cause of action for the purpose under the Limitation Act has to be taken as the date when the work was done and the limitation provided is three years from the said date. It is argued that the period of limitation has to be taken under Section 53 B(2) of the DD Act which provides a limitation period of 6 months from the date when the cause of action accrued whereas in the present case the cause of action would accrue to the plaintiff when the work was done and fled and therefore, the suit is barred by limitation under Section 53 B(2) of the DD Act. It is 18 also contended that the works stated at serial no. A to F are clearly barred by time from the date from which the relevant works were executed since it has been specifically stated that the final bill was paid on 27.3.1998 and the present suit was filed in August 2001.
The Ld. counsel appearing on behalf of the plaintiff has refuted the aforesaid allegations and it is argued that the plaintiff had completed the work in accordance with agreement on 15.1.1994 in respect of which a completion certificate had been granted by the department in the year 1994 which is Ex.PW1/4. It is stated that the DDA was unable to handover the possession of the flats to the allottees as the plaintiff had not completed the finishing work i.e. final coat of white wash, fixing of fittings etc. which work was later on completed but DDA did not come forward to take the possession but rather made the plaintiff to continue its watch and ward as a result of which the DDA entered into a Supplementary Agreement dated 11.1.2000 which is Ex.PW1/5 in respect of which the defendant had taken two bank guarantees 19 from the plaintiff. The said agreement is stated to have expired and even after the expiry of the said agreement the defendant was unable to allot the flats to the allottees. It is pointed out that the defendant refunded the security deposit of the plaintiff in December 1999 whereas the maintenance period already lapsed on 15.7.1994 and the final bill was paid by the defendant on 27.3.1998 leaving behind the amount claimed in para 10 of the suit. It is further contended that the part payment towards watch and ward has been made to the plaintiff on 27.3.2000 due to which reason the suit of the plaintiff is within the limitation.
I have considered the rival contentions of both the parties. I have gone through the pleadings of para 10 of the plaint according to which the defendants refunded the security deposit of the plaintiff in December 1999 and paid the final bill on 31.3.1998 but still the final bill and following amounts have not been paid by defendants to the plaintiff company:
20
Sr. No. Head Amount (Rs.)
1. On account of balance amount 21889.58 due and payable against the rates of extra items and Deductions item paid less/ deducted excess arbitrarily by the Department.
2. On account of balance amount 10,594.78p due and payable for escalation under Clause 10CC of the agreement.
3. Amount withheld unlawfully for 10500 the issue of locks by department and locks have been handed over to the defendants/ affixed at the site
4. Amount still unlawfully withheld 85000 on account of pending allotment of remaining Flats
5. Less payment under Clause 10 52696 CC as per bills submitted by plaintiff on 5.6.2000 vide reference no. KRB/BP/DDA/99 2000/569
6. On account of less payment 15400 towards watch & ward of completed works for the period 26.9.97 to 26.11.97 @ Rs. 7700/ per month.
7. On account of payment towards 69300 watch and ward of completed works paid less by defendant as per Circular no. 510 dated 21.5.1997 21 Sr. No. Head Amount (Rs.)
8. Towards watch & ward for the 1,12,200.00 period 16th March, 2000 upto the date of filing of the suit @ Rs.6600/ per month.
Total 3,72,793.19 I have considered the rival contentions and also the arguments advanced by both the parties. In so far as the argument raised by the defendant with regard to the provisions of Section 53B (2) is concerned, I have considered the provisions of Section 53 B(2) of DD Act which is a special enactment and had the effect of overriding the general law i.e. The Limitation Act. The provisions of Section 53B (1) provides that:
No suit shall be instituted against the authority, or any member thereof, or any of its officers or other employees, or any person acting under the directions of the Authority or any member or any officer or other employee of the 22 Authority in respect of any act done or purporting to have been done in pursuance of this Act or any rule or regulation made thereunder until the expiration of two month after notice in writing has been, in the case of Authority, left at its office, and in any other case, delivered to, or left at the office or place of abode of, the person to be sued and unless such notice states explicitly the cause of action, the nature of relief sought, the amount of compensation claimed and the name and place of residence of the interning plaintiff and unless the plaint contains a statement 23 that such notice has been so left or delivered.
Further, Clause 2 of Section 53 B of the DD Act provides that:
No suit as is described in sub Section (1), shall, unless it is a suit for recovery of immovable property or for a declaration of title, thereto, be instituted after the expiry of 6 months from the date on which the cause of action arises.
In this regard the Delhi High Court has in the case of Municipal Corporation of Delhi Vs. Kundan Lal Sharma reported in ILR (1969) Delhi 715 under similar circumstances where the plaintiff had filed the suit for injunction for removal of construction on land, observed 24 that:
" ....... It is not a suit either for the recovery of immovable property or for a declaration of title thereto.
In these circumstances subsection (2) of Section 478 of the Act will apply in full force and the suit have have had to be filed within 6 months from the date on which the cause of action arose. As stated above, according to the findings of the learned Subordinate Judge, the cause of action arose either in August 1959 or in December, 1959. Whatever be the date the suit has undoubtedly been filed after the expiry of six months from the accrual of the cause of action and therefore, it was 25 instated after the time prescribed by Section 478 (2)........."
Similarly in the case of G.C. Sharma Vs. MCD reported in 1979 MCC 234 it was observed that:
" ............ The power to grant and revoke a licence is vested in the Municipal Corporation by the Delhi DMC Act and it is by virtue of Section 430 of the Act and even if the Corporation exceeds this power, it cannot be said that the Corporation had no power to cancel the licence. The aggrieved party wants to challenge this action of the Corporation by way of a suit, it must first give two months' notice to the Corporation and must file the suit within 6 26 months from the date of cancellation of licence otherwise it is bound to fail being time barred....."
Applying the settled principles of law to the facts of the present case it is evident that the provisions of Section 53B are paramateria to the provisions of Section 478 of the DMC Act. In the present case the cause of action in respect of the claims 1 to 6 arose when the bill was paid b the defendant leaving behind the amount claimed. The cause of action having commenced to run on the date of payment of the final bill i.e. 27.3.1998 it was necessary for the plaintiff to have given a notice to the DDA within a period of six months which notice was in fact given on 30.5.2000 and the suit should have been filed after two months of the said notice but within 6 months from the date the cause of action started to run. The present suit was filed thereafter on 6.9.2001 and being a suit for recovery of money (not of immovable property) it 27 is clearly beyond the period of limitation so provided under Section 53B of the DD Act.
Even otherwise it is presumed that the cause of action accrued on the date of issuance of the legal notice i.e. 30.5.2000 the suit is still required to be filed within the period of 6 months from the date on which the cause of action arises and the suit having been filed on 6.9.2001, under no circumstances, can it be said that the claims made by the plaintiff are within the period of limitation.
Alternatively even if one goes by the application of the general enactment it is the Limitation Act in so far as the claims at serial no. 1,2,3,4,5 and 6 are concerned, the same are clearly time barred since the maintenance period had lapsed on 15.7.1994 and the final bill was paid by the defendant on 27.3.1998. Under these circumstances, the cause of action commenced and started running from the date when the final bill was paid by the defendant on 27.3.1998 and does not stand extended merely because the plaintiff had accepted the same without making any protest for almost three years thereafter. The 28 present suit having been filed on 6.9.2001 is beyond the period of limitation under the provisions of Limitation Act.
Therefore, in view of my aforesaid discussion, I hereby hold that the suit of the plaintiff is barred by the provisions of Section 53 B(2) of DD Act. Issue is decided in favour of the defendants and against the plaintiff. Issue no. 3 Whether the suit has not been filed by a duly authorized person?
Onus of proving this issue was upon the defendant. It is apparent from the record that the present suit has been filed by the plaintiff K.R. Builders (P) Ltd. through its Managing Director K.R. Gupta who has been duly authorized to file the present suit vide Board Resolution which is Ex.PW1/1. The Memoradum and Article and Association and Incorporation certificate have also been placed on record which are Ex.PW1/2 and Ex.PW1/3. Even in the crossexamination of PW1 not even a single suggestion has been put to the witness of plaintiff and it seems that the defendant has abandoned the 29 issue. Therefore, the issue is disposed off as not pressed. Issue no.4 Whether the plaintiff is entitled to the amount claimed in para 10 of the plaint?
Issue no. 5 Whether the plaintiff is entitled to the interest? If so, at what rate and for what period?
Both the issues are clubbed together for the sake of convenience involving common discussion. In view of my detailed findings with regard to the issue no. 3, since I have already held that the suit of the plaintiff is beyond the period of limitation as provided under Section 53 B(2) of the Delhi Development Act 1957, I hereby hold that the plaintiff is not entitled to recover any amount from the defendant DDA. Issues are decided in favour of the defendants and against the plaintiff. Relief:
In view of my findings with regard to the various issues, I hereby hold that the plaintiff is not entitled 30 to recover any amount from the defendant DDA.
Suit of the plaintiff is hereby dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly. File be consigned to Record Room. Announced in the open court (Dr. KAMINI LAU) Dated: 21.5.2009 Addl. District Judge: Delhi 31