Delhi District Court
M/S G.R.Gupta Brothers Pvt Ltd vs M/S Tarapore & Co. on 11 September, 2020
IN THE COURT OF MS. VANDANA JAIN, LD. ADJ07, SOUTH EAST
DISTRICT, SAKET COURTS,NEW DELHI
(MORE THAN 11 YEARS OLD)
CS NO:8531/16
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO.
(HEARING THROUGH CISCO WEBEX)
IN THE MATTER OF
Sh. Gulab Rai Gupta
Having its principal and registered office at
7/11, Kalkaji Extension, New Delhi 110019
............................PLAINTIFF
Versus
1. M/s Tarapore & Co.
Engineers & Contractors
Dhun Building, 827, Anna Salai, Chennai600002
2. M/s Tarapore & Company
501502, Ansal ChamberII
6, Bhikaji Cama Place, New Delhi 16
...........................DEFENDANTS
Date of institution : 24.08.2009
Date of reservation of judgment :25.08.2020
Date of pronouncement of judgment :11.09.2020
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 1/52
JUDGMENT
1. This is a suit for recovery of Rs.25,87,182/ alongwith interest.
2. Brief facts of the case are that Plaintiff Company is carrying on the business of plumbing and fire fighting works. Defendants awarded the work of plumbing/sanitary at Metro CA no. 3C 41 A and 3C 41 B (Civil Works) (hereinafter referred to as Package A and Package B) for construction of seven elevated stations from Palika Place to Kirti Nagar (Line3) to the plaintiff by the award letter dated 17.05.2004. After the award of the work, keeping into consideration the quantum of the work to be executed and the period within which the work was required to be completed, plaintiff geared up the entire resources and mobilized them to the site of the work.
3. During course of the execution of the work the various amounts payable were demanded in the letter dated 03.09.2005. It was pointed out that the material of the value of Rs. 21,876 / was taken away by the defendants. By this letter, complaint was also made with regard to certain deductions and request was made for making the payment. This was followed by the letter dated 24.09.2005. By this letter, it was also pointed out that escalation is M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 2/52 also payable on the items taken from DSR and also on similar items derived from the tender.
4. It is further stated that the defendants miserably failed in making the payments for the work executed by the plaintiff.
5. It is further stated that by the letter dated 08.10.2005, the defendants were informed that the work is near completion but defendants did not fulfill the obligations. It is further stated that one of the most fundamental obligations was to make the payment for the work executed but defendants miserably failed in this regard.
6. It is further stated that uncalled deductions were made by defendants from the running bills of the plaintiff which were protested by the plaintiff by the letter dated 10.3.2006. The contractual failures on the part of the defendants and document were also pointed out by the plaintiff by the letter dated 20.3.2006 and demands were raised vide letter dated 10.04.2006.
7. It is further stated that defendants, instead of making the payments as demanded by the plaintiff, sent a letter dated 12.4.2006 in reply to plaintiff's letter dated 10.4.2006 stating M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 3/52 therein that the details given by the plaintiff was being examined through. This was followed by the letter dated 29.4.2006. It is further stated that when there was neither any response nor the deducted amount of Rs.4,88,258/ was refunded to the plaintiff, letter dated 19.06.2006 was written by the plaintiff. Plaintiff suggested for arranging a meeting for settling all such issues and again request was made by the letter dated 05.08.2006. Plaintiff also pointed out in this letter that in the meeting held with Sh. A.K.Gupta, DMRC, the Managing Director of the plaintiff was assured that the amount for Rs. 27,128/ on account of damages of electrical cable at Kirti Nagar would be released. It is further stated that against 19th RA bill (packageB), only part payment was released. It is further stated that plaintiff also pointed out by this letter that the amount of Rs 1,40,219/ and Rs, 2,17,678/ were deducted arbitrarily from packages A and B respectively and were not released. Several letters demanding payments were written by plaintiff and despite defendant's failure to make the payment, the work of package A was completed on 18.10.2006 and the work of package B was completed on 23.12.2006. Thereafter, the works were taken over by the defendants after being satisfied with the same. Again another letter dated 30.12.2006 was written in this M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 4/52 regard. It is further stated that defect liability period also expired on 30.04.2008.
8. It is further stated that defendants instead of releasing the payments, wrote a letter dated 7.11.2006 which was relied by plaintiff on 13.01.2007 followed by another letter dated 10.02.2007. When the defendants failed to make the payment further requests were made by the letters dated 3.3.2007 and 21.4.2007.
9. Defendants vide letter dated 18.4.2007 enclosed the final bills as per which, excess amount of Rs. 1,59,709/ was made to the plaintiff for package A and Rs. 84,241.97 for package B. These bills were refuted by plaintiff. It is further stated that the total value of work executed for package A is Rs. 89,45,012/ and not Rs. 87,25,191/. Similarly, total value of work executed for package B is Rs. 73,63,512/ and not Rs. 71,57,222/. The said difference is only because of extra items in both the packages which were regularly and continuously paid upto pre final bill but arbitrarily deducted from the final bill.
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 5/52
10. Plaintiff vide its letter dated 30.04,207 clarified that the alleged recoveries were never accepted by the plaintiff. It is further stated that defendants instead of making the payment, sent a letter dated 31.05.2007 stated to be a reply to plaintiff's letter dated 30.04.2007 and 19.05.2007. It was replied to by plaintiff on 09.06.2007. This was followed by the letter dated 25.06.2007 pointing out therein that the payment of Rs. 19,75,926/ in the final bills in respect of Package A & B have not been released. This also includes the refund of the amount of security deposit of Rs. 9,66,744/. Again, request was made for making the payment. Thereafter, further letters dated 04.08.2007, 03.09.2007, 05.09.2007, 22.09.2007, 15.10.2007 and 01.12.2007 were written by the plaintiff.
11. It is further stated that defendants assured for releasing the payment but this was not paid. Again payment was demanded by the plaintiff vide letter dated 02.08.2008 as per details given below:
(i) Payment of final bill (Package A) Rs. 3,84,415.30
(ii) Payment of final bill (Package B) Rs. 6,27,475.70
(iii) Retention money (Package A) Rs 5,27,054/
(iv) Retention money (Package B) Rs. 4,39, 690/ Total Rs. 19,78,635/ M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 6/52
12. A legal notice dated 11,12,2008 was served upon defendant demanding Rs.10,75,923/ in respect of package A and Rs. 12,88,930/ for Package B. Thus, the total amount payable in respect of Packages A and B is Rs.23,64,853/ upto 31.12.2008.
13. A reply dated 30.12.2008 to the legal notice dated 11.12.2008 of the plaintiff was sent wherein it was stated that excess payment of Rs. 1,45,210/ in respect of Packages A and Rs. 43,371/ in respect of package B has been made to the plaintiff.
14. It was stated that following amounts were payable by the defendants to the plaintiffs for which suit was filed.
(i) Payment of final bill (package A) Rs. 3,84,415.30
(ii) Interest on this amount from
21.05.2007 till 31.07.2009. Rs. 1,52,040/
(iii) Payment of final bill (package B) Rs. 6,27,475.70/
(iv) Interest on this amount from 21.05.2007 till 31.07.2009 Rs. 2,48,170/
(v) Retention money (Package A) Rs. 5,27,054/
(vi) Interest on this amount from 30.04.2008 to 31.07.2009 Rs. 1,18,782/
(vii) Retention money (Package B) Rs. 4,39,690/
(viii) Interest on this amount from 30.04.2008 to 31.07.2009 Rs 99,093/ Total Rs. 25,87,182/ M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 7/52
15. Written statement was filed by the defendants jointly wherein it was stated that suit of the plaintiff is barred by limitation for part of the amount claimed by the plaintiff. It is stated that entire court fees has not been paid as the claims falling under two different contracts has been filed under this suit which constitute separate cause of action and separate set of court fee is payable in respect of claims falling under the two contracts.
16. It is further stated that under DMRC Civil Works Contract nos.
3C41A & 3C41B were awarded to the defendants. Defendants vide their letter no. DMRC/W.O/209/2004 dated 17.05.2004 awarded the plumbing and sanitary works to the plaintiff. All the terms and conditions, general and special, of the main contract with regard to measurements, payment, safety, quality, specifications etc, were equally applicable to the plaintiff.
17. It is further stated that work started only in June, 2004 but it was delayed by the plaintiff as the date of completion was 25.12.2004 but the work was completed on 15.04.2006 i.e. after the delay of 16 months. It is further stated that DMRC awarded the contracts to the defendants on 26.06.2003 and taking into consideration the nature of work to be done by the plaintiff, the M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 8/52 work was awarded to them on 17.05.2004. This has its adverse consequences on the defendants vis a vis DMRC in as much as DMRC may impose penalty by way of liquidated damages on the defendants. Arbitration has been invoked and the matter is in court in respect of both contracts. In these circumstances, unless this issue gets crystallized, nothing would be payable to the plaintiff. Moreover, as against the final bills, the plaintiffs have been overpaid to the tune of Rs 1,59,709.00 in respect of Package A and Rs 82,242.00 in respect of Package B. Thus, there is an over payment of Rs.2,43,951.00.
18. It is further stated that it was a term of the contract that money would be paid to the plaintiff only on the works being approved after measurements, quantities being accepted by DMRC and payments being made by DMRC to the defendants. So long as these issues remain pending, nothing is payable to the plaintiff in terms of the contract.
19. It is denied that any material of the value of Rs.21,876.00 was taken away by the defendant from the stock of the plaintiff and in this regard, a letter dated 28.05.2005 was written by the defendant denying the fact taking such material and the plaintiff was asked to M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 9/52 furnish the documents in support of its contentions but no documents was furnished and matter ended after 28.05.2005.
20. Plaintiff left a lot of balance work with defects, when the works were handed over to DMRC on 15.04.2006. It is further stated that defects pointed out in the work by DMRC had to be attended to by the defendants and these works were handed over after rectification, to DMRC on 13.01.2007. The plaintiff had even expressed itself in January, 2007 about having rectified the defects so their claim that by 08.10.2005, work was nearing completion is false.
21. It is further stated that there have been no uncalled for deductions. Letters of plaintiff dated 10.03.2006 and 20.03.2006 were responded to by the defendants vide their letters dated 16.03.2006, 27.03.2006 and 08.04.2006.
22. It is further stated that letter dated 10.04.2006 was responded to by the defendants clarifying their position on the deductions, vide letters dated 25.03.2005, 12.05.2005, 16.03.2006 and 27.09.2006. The plaintiff was requested to verify the veracity of the claim but it did not come to the office of the defendants for the M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 10/52 said purpose and did not revert back. Thus, they abandoned the claim. It is further stated that a repeated request was sent by the defendants vide their letter dated 31.05.2007, but to no avail. On the contrary, instead of responding to the defendant's communications, the plaintiff chose to write to DMRC directly. It is further stated that another letter dated 12.09.2007 sent by the defendants did not elicit any positive response from the plaintiff.
23. The defendants have further relied upon letters dated 30.03.2006, 22.04.2006, 31.05.2007 and 12.09.2007 and have denied receipt of plaintiff's letters dated 29.04.2006, 19.06.2006 and 05.08.2006.
24. It is stated that DMRC had held up the payments because the plaintiff had failed to attend to and rectify the defects and complete the balance work. The defendants had issued a reminded dated 07.11.2006, which was the 10 th reminder to the plaintiff to attend to and rectify the defects and complete the balance works. Instead of doing so, two months later the plaintiff wrote letter dated 13.01.2007, even though the defects had not been rectified within time. Even letter dated 10.02.2007 was simply a sequel to the letter dated 13.01.2007, which was duly responded to by defendant's M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 11/52 letter dated 23.02.2007. It is, however, denied that letter dated 03.03.2007 was never received by the defendants, nor was letter dated 21.04.2007 which was addressed to DMRC and not to the defendants. However, letter dated 21.04.2007 was forwarded by DMRC to the defendants, which was duly responded to by the defendants vide their letter dated 30.06.2007.
25. It is further stated that the statement was sent under cover of letter dated 18.04.2007 which showed excess amount paid to the tune of Rs.1,59,709.00 in respect of Contract A and Rs.84,241.97 in respect of Contract B. It is stated that the rest of the contents about the value of work done as claimed by the plaintiff for Contract A and B are wrong and are denied and the values given by the defendants are reiterated as correct. As far as extra items are concerned, it is stated that they were payable under three different categories, which are given as under: Extra items derived from DSR Discount @ 7.5% Extra items derived from Non DSR Discount @ 15% Extra items derived from the market Rates /price Discount @ 20%
26. It is further stated that in the event, the items could not relate to DSR and non DSR items, where rates were settled, market rates had to be applied with the above mentioned discounts. It is denied M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 12/52 that any deduction was arbitrary. The deductions made in the RA bills were provisional.
27. Defendants had been repeatedly clarifying its position on matters of recovery and payment and once again, did it vide letter dated 31.05.2007, which was in response to Plaintiff's letter dated 30.04.2007 and 19.05.2007 having clarified its stand, it was not felt necessary to repeatedly respond to letters dated 04.08.2007, 03.09.2007, 15.09.2007, 22.09.2007, 15.10.2007 and 01.12.2007. It is denied that any payment of Rs.19,75,926.00 or Rs. 9,66,744.00 in respect of Contract A and B was due or payable to the plaintiff. It is stated that suit of the plaintiff is liable to be dismissed.
28. Replication to the written statement filed was by the plaintiff wherein contents of the written statement were denied and contents of the plaint were reiterated. The plaintiff has elaborated in the replication that in Package A, amount of Rs.5,27,054 is refundable, being the retention amount Rs.4,47,251 was deducted from the running bill of the work executed and Rs.79,803 from escalation payment was deducted. Similarly with respect of M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 13/52 Package B, the amount of Rs.4,39,690/ is refundable being the amount of security deposit deducted from the running bills out of which Rs. 3,68,176 was deducted from the running bills of the work executed and Rs.71,514/ deducted from escalation payment made to the plaintiff.
29. With respect to the cement bags, it is stated that the major discrepancy is on account of the recovery of cement. The defendant has shown in the statement the recovery of the 1097 cement bags in Package A and 1217 cement bags in Package B whereas total 686 cement bags were consumed by the plaintiff for Package A out of which 536 was issued by the defendant and remaining 150 were purchased by the plaintiff from market. Similarly, in package B, 650 bags were consumed out of which defendant issued 551 cement bags and 100 bags were purchased from market by plaintiff. The defendant has failed to furnish any documents showing a receipt of these bags under both the packages by the defendant to the plaintiff.
30. With respect of the water charges, it is stated that plaintiff made its own arrangement of water by installing a pump in the bore well. As regard, electricity, it is stated that the payment were made on M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 14/52 actual consumption basis. The discrepancy has occurred due to the rebate deducted subsequently in the final bill at different rates whereas in all the running bills, the payments were made to the plaintiff after deducting 7.5% rebate. All other averments are denied.
31. Vide order dated 15.12.2010, AR of the plaintiff company has carried out admission/denial of the documents of the defendants and had admitted fifteen documents which are exhibited as Ex. D1 to Ex. D15 details.
32. AR of the defendants has also carried out admission /denial of the documents of the plaintiff and has admitted twelve documents which are exhibited as Ex. P1 to Ex P12.
33. After completion of pleadings, following issues were framed vide order dated 31.01.2011.
(i) Whether the suit is partly barred by limitation, as alleged in the written statement? (OPD).
(ii) Whether the suit is liable to be dismissed in view of preliminary objection no. 2 in the written statement? (OPD).
(iii) Whether the suit is properly values for the purpose of Court fee and jurisdiction? (OPP).
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 15/52
(iv) To what amount, if any, the plaintiff is entitled from the defendants towards principal? (OPP).
(v) Whether the plaintiff is entitled to interest and if so, at what rate and to what amount? (OPP).
(vi) Relief.
34. During plaintiff's evidence, plaintiff Gulab Rai Gupta examined himself as PW1 and tendered his affidavit which is Ex. PW1/A.
35. During defendant's evidence, defendant examined DW1 S. Jayakumar and tendered his affidavit which is Ex. DW1/A.
36. Thereafter, matter was listed for final arguments.
37. I have heard the arguments on behalf of both the parties through CISCO Webex and have perused the record carefully.
38. Written submissions were filed by both the parties.
39. I shall deal with the issues one by one.
40. Issue no. 1: Whether the suit is partly barred by limitation, as alleged in the written statement? (OPD) Ld. Counsel for defendant has argued that suit is partly barred by the limitation as the some of the times relates back to a period of more than three years prior to the date of filing of the suit. The M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 16/52 contention of the defendants are misconceived as it is the own case of the defendant that the running bills were provisional in nature and it was the final bill which took care of all the recoveries to be made and dues to be payable. Final bill of the defendant is dated 18.04.2007 and the suit was filed in 2009 i.e. within 3 years from the date of receiving of the final bill. Therefore, the suit is well within the period of limitation. Issue no. 1 is decided against the defendant and in favour of the plaintiff.
41. Issue no. 2 Whether the suit is liable to be dismissed in view of preliminary objection no. 2 in the written statement? (OPD) This issue was never pressed by the Ld counsel for defendant during the course of the arguments and even otherwise, this is part of issue which is framed for entitlement of the recovery of amount sought in the plaint by the plaintiff and therefore, this issue being irrelevant is struck off.
42. Issue no. 3: Whether the suit is properly valued for the purpose of court fee and jurisdiction? (OPP) M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 17/52 The onus to prove this issue was upon the plaintiff. As per the plaint, the suit was filed for recovery of Rs.25,87,182/ on which the advalorem court fees has been filed. The onus shifted upon the defendant to show as to how the court fee was deficient. The same was never pressed by the defendant either during evidence or during the final arguments. In my considered opinion, proper court fees have been filed and this issue is decided in favour of plaintiff and against the defendant.
43. Issue no. 4:
(vii) To what amount, if any, the plaintiff is entitled from the defendants towards principal? (OPP).
Ld. Counsel for the plaintiff has argued that suit for recovery of money has been filed against the defendant pursuant to the work order dated 17.05.2004 issued by the defendant company for Package A and B.
44. Ld. Counsel for plaintiff during the course of the arguments stated that he does not wish to press certain claims and therefore, alongwith written submissions, he has filed two annexures wherein M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 18/52 he has forgone some of his claims. Those annexures with respect of Package A and Package B are reproduced hereinunder for the sake of convenience.
45. PROJETPLUMBING WORK AT DMRC(DWARKA LINE3) PACKAGE A
46. SUMMARY OF FINAL ACCOUNT Payable amount as per final bill Rs. 2,84,172/ prepared by plaintiff Payable amount as per final bill Rs. 1,59,709/ prepared by defendant Difference in Amount Rs. 4,43,881/ Claim stand Claim Detail summary of withdrawn differences in plaintiff and defendant final bill Difference in work 21,536 done due to measurements Difference in work 1,98,285 done due to Rebate in extra items Difference in recovery
(a) Cement (536 1,22,360 bags as per GBPL) & (1097 bags as per T and Co.)
(b) Sand 14,801
(c) Aggregate 1,047
(d) Brick ((7850 nos. 3,500 as per GBPL) & (9600 nos. as per T & Co.)
(e) Steel 6,479
(f) M30 (RMC) for 2,835 Harvesting Well (h) Pump for hire 284 charges (I) Labour Supply 4,846
(j) Safety 2,350
(k) Electricity 4,267
(l) Water charges 87,252
(m) Supply of pump 5,913 M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 19/52 1.5 HP instead of 5 HP Calculation of VAT. 20,050 T. Tax labour cess & Retention due to difference in work done of plaintiff and defendant Sub Total 4,22,698 21,183 Total Difference in 4,43,881 Final Bill Thus, plaintiff claim will be Rs. 2,84,172 / minus Rs. 21,183/=Rs. 2,62,989/ PROJETPLUMBING WORK AT DMRC(DWARKA LINE3) PACKAGE B SUMMARY OF FINAL ACCOUNT Payable amount as per final bill Rs. 4,27,760/ prepared by plaintiff Payable amount as per final bill Rs. 84,241/ prepared by defendant Difference in Amount Rs. 5,12,001/ Detail summary of Claim Claim differences in plaintiff stand withdra and defendant final wn bill Difference in work 699 done due to measurements Difference in work 2,05,391 done due to Rebate in extra items Difference in recovery
(a) Cement (551 bags 1,49,040 as per GBPL) & (1217 bags as per T and Co.)
(b) Sand 49,341
(c) Aggregate 1319
(e) Steel 7758
(f) M30 (RMC) for 3893 Harvesting Well
(g)back filling 3970 (h) shuttering 422 material (I) Labour Supply 1253
(j)cable damaged at 27128 kirti nagar
(k) hire charges for 3000 JCB (miscellaneous) M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 20/52
(l)Electricity 5564
(m) Water charges 71,572 Calculation of VAT. T. 18819 Tax labour cess & Retention due to difference in work done of plaintiff and defendant Sub Total 4,75,344 Total Difference in 5,12,001 Final Bill Thus, plaintiff claim will be Rs. 4,27,760/ minus Rs. 36,657/=Rs. 3,91,103/
47. Plaintiff has claimed the following amounts under both the packages after adjusting the claims to be withdrawn.
Package -A Package -B
Balance amount payable in respect of Rs. 2,62,989/ Rs. 3,91,103/
work executed inclusive of extra items
Balance escalation amount Rs. 49,035/ Rs. 1,12,623/
Retention money Rs. 5,27,059/ Rs 4,39,690/
48. Apart from these claims, Ld counsel for plaintiff has also disputed the recoveries which is shown in the final bills of the defendant.
49. Now, coming to the above claims one by one.
50. CLAIM NO. 1: BALANCE AMOUNT OF WORK EXECUTED: ARGUMENTS OF PLAINTIFF: M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 21/52
51. Ld counsel for the plaintiff with respect of the balance work executed inclusive of extra items in Package A has argued that final bill of the plaintiff dated 19.05.2007 has been filed on record alongwith the complete details of the final bill of Package A. The final bill has already been filed by the defendant wherein the defendant has shown that excess amount of Rs1,59,709/ paid to the plaintiff by defendant has to be recovered but no counter claim was filed.
52. Ld counsel for plaintiff has argued that there is no dispute regarding the quantity and work executed between the parties. The plaintiff have shown the actual work done and to be of Rs.89,45,012.33 whereas the defendant has shown the same to be of Rs. 87,25,191. He has further argued that this difference is because of raising the claim of extra/deviation items by the plaintiff to the tune of Rs.1,94,914/ whereas the defendant claimed the same to be of Rs.17,43,628.770. He has further argued that there is a difference of Rs.1,98,285.23/ which is because of the extra discount of 15% and 20% deducted by the defendant in the final bill.
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 22/52
53. Ld. Counsel for plaintiff further argued that similarly, in Package B, there is a difference of Rs.2,05,391.34 which is also because of the same reason of unilaterally deducting rebates at higher rates.
54. Ld. Counsel for plaintiff has further argued that all through the time when the work was executed and the RA bills were prepared, the discount @ 7.5% was deducted by the defendant qua extra item and the payments were paid and never ever any dispute between the parties had occurred on this account. Ld counsel for plaintiff has argued that abruptly in the final bill, the discount were deducted @ 15% and 20% unilaterally by the defendant, though, it is matter of record that no rate was settled qua rebate for extra items. Ld counsel for plaintiff has further argued that the said extra rebate could not have been unilaterally charged as impliedly, it was agreed to be deducted @ 7.5% only and there was no dispute between the parties with respect to the same.
55. Ld. Counsel for plaintiff has further argued that certain revoveries have been shown by the defendant in the final bill out of which, he is objecting to recovery only qua cement, sand and water charges and rest all he was forgone. He has argued that these M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 23/52 recoveries are bad. He has further argued that Rs.1,22,360/ is shown as recovery for 1097 cement bags. It is argued that no proof of supplying 561 bags to plaintiff over and above, 536 bags in Package A has been filed. Secondly, no proof of supplying 666 bags of cement over and above, 551 bags has been filed by defendant. It is stated that deduction qua cement can only be done if the same is done by the DMRC and not otherwise.
56. With respect to the sand, Ld. Counsel for plaintiff has argued that no sand was provided by the defendant and there is no document to show any sand was ever provided. The recovery of Rs. 14,801/ with respect to sand in Package A and Rs. 49,341 in respect of Package B is bad in law.
57. With respect to the water charges, Ld counsel for plaintiff has argued that the water was to be arranged by the plaintiff and no water was ever supplied by the defendant. It is argued that had any water being supplied by the defendant, the deductions would have been made in the RA bills and therefore, deduction of Rs. 87,252/ towards water charges in Package A and Rs. 71,572/ in Package B are bad in law.
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 24/52
58. Ld. Counsel for plaintiff has further argued that these deduction has been wrongly made in the alleged final bill and therefore, plaintiff is entitled the claim of Rs. 2,62,989/ in Package A and Rs. 3,91,103/in Package B, after adjusting the claims withdrawn. Arguments of defendant.
59. On the other hand, Ld counsel for defendant has argued that the defendant was awarded a civil work contract by DMRC and out of the composite work awarded by DMRC, plaintiff was given the work of plumbing/sanitary work for Package A and B by the defendant vide work order dated 17.05.2004. It was further argued that in the work order, it was mentioned that the rebate of 7.5% and 16% was to be given on Delhi Schedule of Rates (DSR) items and non DSR items. In the work order itself, it was mentioned that all the terms and conditions of the main contract regarding the measurements payments and quality etc were applicable to the plaintiff. It was also argued that water and electricity were to be arranged by the plaintiff as per the work order. With respect to the retention money, the same submissions has been made that 2.5% was to be released after successful completion of the work and the balance 2.5% after the completion of defect liability period. Ld M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 25/52 counsel for defendant further argued that defendant had a lien on this retention amount as per clause 82 of the main contract and is entitled to adjust the retention against the recoveries.
60. Ld counsel for the defendant further argued that the terms of the DMRC contract were applicable to the work order and this fact was admitted by the plaintiff in para no. 4 of the replication filed by plaintiff.
61. It is argued that both the parties have filed their final bill both for Package A and B with respect to the work done wherein the difference of approximately of Rs. 2 lacs is there. It has been argued that as per the plaintiff discrepancies entry were due to the rebate on the extra items and defendant has wrongly deducted 15% and 20% rebate on extra items whereas it was mutually agreed that 7.5% would be due the standard rebate.
62. Ld. Counsel has argued that the standard terms and conditions of the main contract were applicable to the parties and the calculations were done according to the Indian Railway standard Schedule of Rates 2010 (hereinafter referred as IR SOR).
63. Ld. Counsel has argued that as per clause 64.6 of the main contract, in case the parties failed to agree upon rate of extra items, M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 26/52 the decision of the Engineer will be final and binding. Ld counsel has argued that during the payment of running bill, only on account payments were made and no rebate given therein at any rate could be considered by itself to be the evidence of any fact in view of clause 73.3 the main contract. The full and final bill was communicated to the plaintiff vide letter dated 18.04.2007 and the rate for extra items were calculated after deducting rebate @ 15% and 20%. The plaintiff protested against the same in the letter dated 30.04.2007 that standard rebate of 7.5% has been agreed on all extra items however, defendant by its letter dated 31.05.2007 denied the same and stated that no rate was agreed for extra items and the rebate of 7.5% deducted on all extra items in the RA bills was provisional and was subject to the final accounts as per clause 73.3 of the main contract. The plaintiff failed to produce any documents to prove that standard rebate of 7.5% was agreed upon, therefore, the rebate determined by the Engineer is final and binding between the parties and this claim is bad in law.
64. With respect to recoveries, Ld. Counsel for defendant has argued that as per the contract, the work order was inclusive of material. Plaintiff failed to produce any construction material including M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 27/52 cement, sand, aggregate etc in terms of clause 48 for execution of the work and therefore, the plaintiff utilized the material of the defendant. Ld counsel for defendant has further argued that plaintiff admits in the replication as well as in the testimony of PW1 that the material was given by the defendant. He has further argued that the quantity of the work executed by the plaintiff is undisputed and therefore, backward calculation of the material used can be made by using arithmetic calculation which is an acceptable practice in the Construction industry. He argued that this fact was put to the plaintiff's witness and he admitted the same.
65. Ld counsel for the defendant has further argued that none of the parties had filed any documents to show the actual material consumed and no record of the material procured by the plaintiff from the defendant was filed by either of the party and therefore, this method of backward calculation has to be followed in order to calculate the quantity of material i.e. cement, sand and aggregate used in the construction work for Package A and Package B. M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 28/52
66. Ld counsel for defendant has further argued that the BOQ items as mentioned in the IR's SOR are relatable to the BOQ items mentioned in the work order of the plaintiff. It is further argued that IR's SOR provide for an adequacy and coefficient of the cement consumed in relation to the quantity of work executed of a specific BOQ item in terms of sound engineering practice. Similarly, the Sand and Aggregate Quantity also are arrived at based on the specification stated as per IR's SOR.
67. It is further argued that in terms of the same, for a BOQ item and the quantity of work executed, the quantity of material consumed for a particular BOQ item is arrived at by making arithmetic calculation as per the Grades and Ratios specified as in the present case. He has further argued that this calculation is in terms of the contract with DMRC and is also an acceptable engineering practice prevalent in the construction industry and was the practice adopted in the contract between the parties.
68. Ld. Counsel for the defendant has further argued that from the calculation done as above, it is evident that the work of Package A could not have been completed without 1097 bags of cement, 4652 units of sand and 4280 units of aggregate and similarly for Package M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 29/52 B work could not have been completed without 1217 bags of cement, 5712 units of sand and 4828 units of aggregate.
69. He has further argued that the averments of the plaintiff that 686 bags were consumed for Package A & 651 cement used for Package B without any proof or method cannot be considered and it was not possible to complete the work with quantities mentioned by plaintiff, therefore, with this calculation it stands established that quantity given by the defendant have been used in the work executed and i.e. defendant is entitled to recover the amount of the remaining bags which the plaintiff was liable to procure under the contract. It is argued that since the plaintiff has failed to prove the fact that it was completed in how much quantity therefore, the theory put forth by the defendant is more probable and accurate and can be considered.
70. He has relied upon "William Robins Vs National Trust Co. Ltd and Ors, AIR 1927 PC 66" to say that onus to prove the same was upon the plaintiff but since the same was not proved, suit of the plaintiff is liable to be dismissed.
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 30/52
71. He has further argued that plaintiff not filed any document on record to show the any material being procured by the plaintiff own its own.
72. Ld. Counsel for defendant further argued that plaintiff was informed of the recovery during the execution of the work vide letters dated 16.03.2006, 27.03.2006, 08.04.2006, 23.02.2007, 31.05.2007 and 12.09.2007. It is stated that receipt of these letters is undisputed. Ld counsel for defendant has further argued that plaintiff has placed on record some receipts of cement and construction material allegedly procured by it for the execution of the work but they have not been proved as per law. It is argued that the said receipt could have been proved only by the author of the document who was never summoned. He had relied upon Madholal Sindhu Vs. Asian Assurance Co. Ltd , AIR 1954 Bom 305, Vedantham Satyavathi Vs. P. Venkataraman 1987 SCC Online AP 342 in this regard.
73. Ld counsel for defendant further stated that onus in civil cases is upon of plaintiff and he has relied upon " Bengal Coal Company Ltd Vs Prosonna Kumar Bhattacharjee & Ors AIR 1932 Cal 39, Anil Rishi V. Gurbaksh Singh 2006 (5) SCC 558" in this regard. M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 31/52
74. Ld. Counsel for defendant further submits that plaintiff has failed to prove that it had provided any material at site and therefore, defendant is entitled to make recovery towards cement bags, sand and aggregate.
75. With respect of the water charges, Ld counsel for defendant has argued that the plaintiff was responsible for making provision for its own electricity and water. It is an admitted case that electricity was consumed by the plaintiff for which it has been charged on actual consumption basis and plaintiff had not denied the same. As far as the water charges are concerned, the plaintiff has failed to make any provision for water and the defendant had provided the same and therefore, the defendant is entitled to recover the amount. It is argued that plaintiff has failed to prove that it had made arrangement of water own its own and in cross examination of PW1, he stated that he had installed tube well at each station for which, it was paid by DMRC. This admission of plaintiff goes on to show that the boring was done for the employer, DMRC and therefore, for any usage of water from the said tube well, it was payable by plaintiff. With respect to the amount charged by the defendant for water, it is stated that the tender charges of 1% of M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 32/52 total valuation of work done for Package A and Package B has been made and defendat is entitled to this recovery made for water charges in the final bill.
FINDIGNS :
76. Before coming to the finding as claim no. 1, it is pertinent to mention here that Ld. Counsel for defendant has stated during the arguments that condition of the main contract which was executed between the defendant and principal employer DMRC were duly applicable to the plaintiff herein and it finds mention in the work contract dated 17.05.2004 as well as in para no. 4 of reply on merits of the written statement which is not denied by the plaintiff in the corresponding para of the replication. Plaintiff has denied this fact and has stated that none of these clauses of the main contract were referred to in the written statement and therefore, they could not be relied upon straightaway during the final arguments.
77. I have heard the arguments on behalf of both the parties in this regard. The award letter dated 17.05.2004 on the basis of which the plaintiff was awarded plumbing and sanitary work is an M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 33/52 admitted document and is Ex. D1. Clause 2 of the said award letter clearly mentions about the applicability of the main contract to the plaintiff. This fact was also admitted by PW1 during his cross examination. Therefore, it is not in doubt that the conditions of the main contract were binding on the parties in the present case also and there was no requirement of putting the specific clauses of the contract in the written statement. The contract was filed by the defendant alongwith documents. Therefore, any denial of the same during the time of admission and denial of documents is insignificant.
78. Now coming to findings on claim no. 1.
79. The major difference of amount of Rs. 2,84,172/ for Package A and Rs.4,27,760/ for Package B is stated to be on account of the extra deduction of rebate @ 15% and 20% in the final bills. The main argument of the Ld counsel for defendant which has already been mentioned above is that no rate was fixed in the contract for the extra items and therefore, as per clause 64.4 of the main contract, the decision of the Engineer was final and binding. M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 34/52
80. As per the award letter dated 13.04.2005, 7.5% rebate was to be given on DSR items and 15% rebate was to be given on non DSR items. The plaintiff has stated that in the pre final bills, the rebate @ 7.5% was deducted and never ever during the currency of the contract, the plaintiff was ever informed that rate of the rebate would be made final at the time of preparing of the final bill. The plaintiff has filed certain pre final bills on record which contains the details of extra items. From these documents on record, It is clear that in all the running bills, the discount @ 7.5 % only has been deducted by the defendant qua the extra items and the payment were made. Though clause 64.4 talks about the provisional payment of the extra items and clause 64.6 says that the decision of the Engineer shall be final and binding however, the contents of the clause 64.4 are very important. They are reproduced herein under: 64.4 -Provisional payment for extra item:-
"In case the Contractor fails to so notify the Engineer in advance, wherever required, or having notified fails to attend the meeting after due notice for settlement of rates, or if mutually agreeable settlement of rates is not M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 35/52 arrived at between the Engineer and the Contractor, the Contractor shall be bound to carry out the works at rates to be decided by the Engineer. In the absence of a finalized rate for a new item, the Engineer shall be free to certify payment to the Contractor based on a provisional rate for the work done under the new item. This shall be subject to upward or downward adjustment after the rate is finalized by him for that item".
81. It is an admitted fact that all the material which has been used on the site was used after the approval of the same from the Engineer Incharge on his authorized representative. The payment of the extra items were duly made during the currency to the contract while passing the running bills however, the Engineer Incharge never flagged this issue of fixing rate of rebates finally at the time of clearing the final bill. It was never intimated to the plaintiff that the rebate deducted under the running bill could be increased at the time of preparation of the final bill. There is no correspondence on record regarding any such intimation to the plaintiff from the defendant's side. The only intimation in this regard has been given for the first time in the letter dated M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 36/52 31.05.2007 i.e. much after the preparation of the final bill in which it was written that no rate have been stated for extra items and as per the agreement 7.5 % was to be given on DSR items and 15% was to be given on non DSR items. This letter of the subsequent period when the dispute had already arisen between the parties and the plaintiff had raised its objection regarding the charging of rebate @ 15% and 20% abruptly in the final bill cannot be considered to be a due intimation in terms of clause 64.4. Though, it is not in dispute that the decision of the Engineer Incharge regarding the fixing of rate was final and binding as per clause 64.6 of the main contract but the time when the decision was taken is very significant. The Engineer Incharge ought to have taken the decision at the time of preparation of the running bills as at that time, he would have known as to whether the payments were being made for DSR items or for non DSR items and what rebate was to be deducted for those items. If this was not possible at that time, then he ought to have intimated the plaintiff about rebate being deducted provisionally. Subsequent deduction in the final bill which is not in consonance with the rates charged under the running bill and without having any correspondence in this regard of the contemporary period clearly shows that this was deliberately M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 37/52 done in order to avoid the payment of legitimate dues to the plaintiff. Therefore, plaintiff is entitled to recover of Rs. 2,84,172/ for Package A and Rs. 427760/ for Package B, but subject to findings on the recoveries alleged by defendant in its final bill and further adjustment of claims withdrawn by plaintiff. Findings on Recoveries are as under:
82. The plaintiff has only objected to the recovery with respect of the cement, sand and water charges and all other claims under the head of recovery as shown in final bill of defendant dated 18.04.2007 have been withdrawn. As far as cement and sand are concerned, no document has been filed by either the plaintiff or the defendant as to how much cement bags or sand were issued from the store of the defendant to the plaintiff or how many bags were received by the plaintiff from the store of the defendant. Though, both the parties to my mind would be having those record with them, but it was not produced for the best reasons known to them. Plaintiff has stated that 536 cement bags were received from the defendant, 150 cement bags were purchased from the market for Package A and similarly a 551 bags was received for Package B from defendant and rest 100 were purchased from market. As far M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 38/52 as the receipt of cement bags from defendant are concerned that need not be proved as the defendant is claiming to have supplied much more cement bags than that stated by plaintiff. As far as purchase of bags of cement from market are concerned, the plaintiff has filed certain receipts in order to prove that 150 bags for Package A and 100 bags for Package B were received from the market but they were not proved in accordance with law. The supplier from whom the cement was allegedly purchased were not called in the witness box in order to prove selling of those cement bags by those supplier to the plaintiff and therefore, it cannot be said that the plaintiff had purchased those cement bags with respect to Package A and similarly with respect to Package B from the market. On the other hand, the defendant has stated that 1097 bags were issued by the defendant for Package A and 1217 bags of cement were issued for Package B. The defendant has attempted to prove the issuance of the alleged quantity of cement bags under Package A and Package B to the plaintiff on the basis of theory of theoretical consumption of the cement bag and sand for executing the required work and Ld counsel for defendant during the course of the arguments have produced the arithmetic calculation and had argued that the calculation are based on the rates provided in the M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 39/52 Schedule of rates of the Indian Railways as the work pertains to DMRC. Ld counsel have put forth the theory stating that without this much quantity of cement bag, sand and aggregate, work could not have been completed by the plaintiff. As far as, the quantity of work executed is concerned, the same is not disputed. In the absence of any evidence to the contrary, this theory seems to be more probable but it is settled preposition of law that party is duty bound to produce the best evidence in his possession in order to prove fact which is asserted by that party. Here, the defendant had greatly emphasized on the fact that all the terms and conditions applicable to the defendant were also applicable to the plaintiff by virtue of the main contract with DMRC, meaning thereby that whatever the defendant is seeking to recover from the plaintiff on account of cement, sand etc similarly defendant would have also claimed the same from the DMRC under the main contract. It was very simple to produce the details of the quantity used in the project claimed by defendants and finally vetted by the DMRC during the finalization of their bill. It would not be out of place to mention here that though plaintiff was only a subcontractor, but the details of final bill of defendant would have been prepared by collating all the bills of SubContractor and the work done by M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 40/52 defendant itself. So, the quantities supplied to the plaintiff herein would have been definitely there in the details of material consumed. If the quantities of cement and sand consumed were calculated theoretically for the entire project, then the quantities supplied to plaintiff would have been mentioned there and could have been shown to the court in order to recover the amount for supplying the alleged bags of cement and sand. But this is not the case herein. Not even a single detail has been produced in the evidence of defendant and merely a bald assertion is being over emphasized that the terms and conditions applicable to defendants were also applicable to plaintiff.
83. Further, this theory of theoretical consumption cannot be taken on record as these calculation which have been forwarded during the final arguments were never put to the plaintiff's witness during his cross examination so as to give him an opportunity to explain them or to give explanation regarding the alleged supply of the cement, sand etc by the defendant to the plaintiff. Similar is the reasoning with respect to the sand. Therefore, recovery shown towards supply of for cements and sand is bad and cannot be allowed to sustain.
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 41/52
84. Water charges: As per the award letter dated 17.05.2004, the water was to be arranged by the plaintiff. The defendant has sought recovery of water charges under both the Packages stating that the water was provided by the defendant. It was argued that the plaintiff did not make any provision for the water and therefore, defendant had to provide the same and in terms of clause 38 of the main contract, it was entitled to recover the amount towards the same. The water charges have been sought to be recovered from the plaintiff @ 1% of the total value of the work done which is stated to be an acceptable practice as per CPWD specifications. The perusal of the record shows that neither the plaintiff nor the defendant has filed any document on record to show that they had made some arrangement for water or purchased it from outside. In the testimony of the PW1, it has come that plaintiff had installed tube well at each station and plaintiff was paid by DMRC for the installation of the tube well as well as for the boring. The defendant is claiming water charges on the pretext that plaintiff did not incur any amount on the water which was to be arranged by the plaintiff as per the work order and therefore, defendant is M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 42/52 entitled to recover the same. From the documents and the testimony of witness from record, it can be easily seen that defendant has not incurred any expenditure on the water which plaintiff used during the currency of the contract. It is not the case of the defendant that the DMRC demanded those installment and boring charges which were paid to the plaintiff, from the defendant. Defendant failed to place any document on record with respect to supplying of water to the plaintiff, therefore, defendant is not entitled to recover anything from the plaintiff towards the water charges. The recovery shown in the final bill of the defendant towards water charges is bad.
85. CLAIM NO. II: BALANCE AMOUNT OF ESCALATION: ARGUMENTS OF PLAINTIFF
86. Ld. Counsel for plaintiff further argued that final escalation bill filed by the plaintiff showed an amount due to be Rs.49,035/ for Package A and Rs. 1,1,2,623/ for Package B. It was argued that only defence taken by the defendant in respect of this amount was that DMRC stopped paying the escalation after 31.01.2006 but nothing has been filed on record to show that neither of such cost M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 43/52 was done by the DMRC or any intimation in this regard was sent by the defendant to the plaintiff at any point of time. The plaintiff was paid because escalation bill as and when the demand was made and this fact is admitted in the cross examination of DW1. Ld counsel for plaintiff further argued that this deduction in both the packages at the time of preparation of the final bill is completely illegal and plaintiff is entitled to recover the same. ARGUMENTS OF DEFENDANT:
87. Ld counsel for the defendant stated that plaintiff had admitted that the escalations was duly paid and therefore, no amount is due and payable towards the escalation. It is stated that cost indices's for escalation were frozen as on 31.01.2006 and no further amount was payable with respect of the same.
FINDINGS
88. It is not in dispute that the escalation bills were paid by the defendant to the plaintiff from time to time. This amount of Rs. 49,035/ in Package A and Rs. 1,12,630/ in Package B were not paid by the defendant on the pretext that DMRC stopped paying escalation to the defendant after 31.01.2006 and that is why, the defendant also stopped paying the same to the plaintiff. No M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 44/52 document in support of this defence has been filed on record. No other defence has been taken to reason out only this amount towards the escalation was withheld. No intimation was given to the plaintiff admittedly by the defendant at the relevant time that escalation bills were being frozen after 31.01.2006. There was no dispute with respect to the amount of the escalation bill. The defendant's witness in his cross examination had admitted that the plaintiff was paid for escalation bill as and when they were raised by it. Have the DMRC stopped paying the escalation after 31.01.2006, the same could have been easily proved being brought by defendant's witness by bringing the necessary correspondence in order to deny the same, but defendant chose not to produce any such document on record, hence, plaintiff is entitled to the said escalation charges.
89. CLAIM NO. III RETENTION MONEY: ARGUMENTS OF PLAINTIFF:
90. Ld. Counsel for plaintiff has argued that clause 5 of the award letter dated 17.01.2004 deals with the retention money as per which 2.5% of the retention money was to be released after the M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 45/52 successful completion of the work and balance 2.5% was to be released after the completion of the defect liability period.
91. Ld counsel for plaintiff has further argued that defendant admits holding of Rs 4,36,260/ in the final bill for Package A and Rs. 3,68,176/ for Package B. He argued that defence taken qua the said retention money is given in para no. 5 of the written statement which talks about alleged penalty to be levied by DMRC and invocation of arbitration by defendant against DMRC. No other defence has been taken in the written statement for justifying the withholding of the retention money. Ld. Counsel for plaintiff had argued that in cross examination of DW1, he admitted that the defendant did not proceed with the arbitration against DMRC and also admitted that no documents have been filed to show any levy of penalty by DMRC on defendant.
92. It was argued that defendant has not stated anything in the written statement about why retention amount has been deducted from the escalation bill. The work was handed over to the DMRC on 13.01.2007 as per the written statement and not even the single defect was pointed out by the DMRC till the expiry of defect M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 46/52 liability period till 31.04.2008. It is argued that plaintiff is entitled to the said retention amount.
ARGUMENTS OF DEFENDANT
93. Ld counsel for the defendant has argued that the provision of retention money is made in the contract in order to ensure the faithful performance of the contract and the correction of the defects in the work carried out by the Contractor. As per the plaintiff, the work was completed on 18.10.2006 for Package A and on 23.12.2006 for Package B but defence of the defendant is that plaintiff failed to complete the work and left the defects when the work was handed over to the DMRC. The DMRC had pointed out the defects which were attended to by the defendant and the work was handed over to the DMRC after rectification on 13.01.2007. The defendant wrote several letters dated 27.09.2006, 07.11.2006 and 31.05.2007 informing the plaintiff about these failures to attend to the defect. But nothing was done and for this reason, no completion certificate for defect liability certificate was taken by the plaintiff. Therefore, plaintiff is not entitled to refund of the said retention money.
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 47/52
94. Ld. Counsel for defendant has also argued that in terms of clause 82 of the condition of the main contract, lien is created on the said retention money and defendant is entitled to adjust the same against recoveries shown in the final bill.
95. Ld. Counsel for defendant has further argued that the defendant was to recover the excess amount as shown in the final bill for Package A and Package B but since no counter claim has been filed, defendant could not claim the same but at the same time, the plaintiff is not entitled to recover anything from the defendant and therefore, the suit be liable to be dismissed. FINDINGS :
96. As per the work order dated 17.05.2004, the retention money @ 5% was to be deducted from the running bill of the plaintiff and it was agreed that 2.5% was to be released after the successful completion of the work and balance 2.5% was to be released after the completion of defect liability period. It is pertinent to mention here that retention money claimed by the plaintiff under both the packages includes the retention money deducted from the running bill and the retention money deducted from all running escalation bill. Two defence were taken by the defendant in the written M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 48/52 statement against this claim. One was that the defendant had invoked arbitration against DMRC and the plaintiff had withheld the retention money of Rs. 4,36,260/ for package A and Rs 3,57,861/ for Package B due to invocation of said arbitration and alleged penalty to be levied by the DMRC upon defendant. As far as this defence is concerned, DW1 in his cross examination has admitted that defendant did not proceed with the arbitration against DMRC. No document has been filed on record to show that any penalty was levied by DMRC upon the defendant or any retention money of defendant was withheld by the DMRC on this count, therefore, this defence is not at all tenable.
97. The second defence taken by the defendant was regarding the non removal of defects by the plaintiff and failure of the plaintiff to do the work as per the specifications. Ld counsel for the defendant had argued that several letters were written to the plaintiff but despite that the defects were not removed by the plaintiff and therefore, defendant is entitled to retain the retention money and is further entitled to adjust the same against the recoveries. As far as these arguments with respect to non removal of defects and non completion of work as per the specifications are concerned, it is M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 49/52 own case of the defendant that the work was handed over by the defendant to DMRC on 31.01.2007. No document has been placed on record to show that the DMRC had levied any penalty on the defendant. Further, defendant has not placed on record any document to show that before handing over the work to DMRC on 31.01.2007, any defect was removed by the defendant by incurring expenditure out of his own pocket and therefore, in the absence of any such evidence on record, the defendant has wrongfully retained the retention money of the admitted amount which has been withheld by the defendant. The second part of the retention amount is out of the running escalation bills. There is no dispute regarding the fact that the said amount was not withheld. Therefore, there is no justification for withholding the retention money deducted from escalation bills therefore, plaintiff is also entitled to recover the said amount of the escalation bills. This claim of retention money to the tune of Rs. 5,27,054/ for Package A and Rs. 4,39,690/ for Package B is allowed accordingly. Total recovery:
98. The plaintiff has filed annexure A and annexure B alongwith written statement which was reproduced in preceding paras M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 50/52 wherein the plaintiff has withdrawn some claims. After adjusting those withdrawn claim and in view of findings on issue no. 4, the plaintiff is entitled to following amounts.
Package -A Package -B
Balance amount Rs.2,62,989/ Rs. 3,91,103/
Balance Rs. 49035/ Rs. 1,12,623/
escalation
Retention money Rs. 5,27,054/ Rs. 4,39,690/
+ +
Total =Rs. 8,39,078/ =Rs. 9,43,416/
Grand total= (Rs. 8,39,078+ Rs. 9,43,416=Rs. 17,82,494/ Issue no. 4 is decided accordingly.
99. Issue no. 5 Whether the plaintiff is entitled to interest and if so, at what rate and to what amount? (OPP).
As per the contract, the plaintiff was not entitled to interest or the delayed payments, however, after raising by the final bill by the defendant, the plaintiff had also raised its these final bill and had objected to the amount of the recovery shown in the final bill of the defendant. Thereafter, the plaintiff had served a legal notice upon the defendant on 11.12.2008 which is Ex. P1 to which a reply dated 30.12.2008 was given which is Ex. P12. From this reply, it was clear M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 51/52 that the defendant refused to pay the amounts due and payable to the plaintiff, therefore, the plaintiff is entitled to recover interest on the amount of recovery of Rs. 17,82,494/ from the date of this reply of the legal notice. Hence, simple interest @ 9% p.a. is granted to the plaintiff from 30.12.2008 till 31.12.2019 and simple interest @ 6% per annum from 01.01.2020 till realization.
100. Issue no. 6 Relief.
Suit of the plaintiff is decreed for a sum of Rs. 17,82,494/ alongwith simple interest @ 9% p.a. is granted to the plaintiff from 30.12.2008 till 31.12.2019 and simple interest @ 6% per annum from 01.01.2020 till realization.
101. Decreesheet be prepared accordingly. No order as to cost.
102. File be consigned to the Record Room after due compliance. Digitally signed by VANDANA
Announced through CISCO Webex VANDANA JAIN
JAIN Date:
on 11.09.2020 2020.09.15
16:15:03 +0530
(Vandana Jain)
ADJ07/SE/Saket Courts/
New Delhi/11.09.2020
M/S G.R.GUPTA BROTHERS PVT LTD VS M/S TARAPORE & CO. page no. 52/52