Delhi District Court
Pnsc Infrastructure Pvt. Ltd vs East Delhi Municipal Corporation on 9 June, 2022
IN THE COURT OF MS. SUKHVINDER KAUR
LD. DISTRICT JUDGE (COMM-02) : SHAHDARA
KARKARDOOMA COURTS: DELHI
CS (COMM) No. 307/2019
PNSC Infrastructure Pvt. Ltd.
Formerly Purnand Construction Co.
Office: E-4/13, Sector 7, Rohini
New Delhi-110085 ......Plaintiff
Versus
1. East Delhi Municipal Corporation
Formerly Municipal Corporation of Delhi
Through its Commissioner
419, Udhog Vihar,
Patparganj Industrial Area,
Delhi-92
2. Executive Engineer (Pr)-I
Shahdara North Zone,
East Delhi Municipal Corporation
G T Road, Opp. Shyam Lal College,
Shahdara, Delhi-110032. ......Defendants
Date of institution : 19.03.2019
Date of conclusion of final arguments : 27.05.2022
Conclusion : Decreed
Page 1 of 27
JUDGMENT
1. The plaintiff has filed the present commercial suit for recovery of sum of Rs. 37,89,677/- against the defendant EDMC.
2. Succinctly, the case of the plaintiff is that plaintiff is a company registered under Companies Act 1956 and doing the business as Government contractors and general order suppliers. The plaintiff has been doing the construction work for last many years and has executed work orders for various departments including the defendant department and is a Class I contractor registered with defendant Municipal Corporation. The defendant invited a tender for work under the name and style of "Construction of Community Hall, at Gokulpuri Village, Shah(North Zone), AC-46".
3. In response to the said invitation to tender, the plaintiff submitted the tenders for the said work order and thereafter the work order was awarded to plaintiff vide work order dated 07.03.2008. The contractual amount was Rs.1,15,45,165/-. The plaintiff paid an amount of Rs.1,59,600/- as earnest money to the defendants. The agreement was executed between the parties and the work contract was to be governed by Standard General Condition of Contract (GCC) amended from time to time applicable to work orders granted by the defendant. The time for completion of work order was only 15 months.
Page 2 of 274. It is further the case of the plaintiff that plaintiff had started the work in the right earnest, however, due to the delay on account of hindrances and delay on the part of Electrical Department of defendant, the work could not be completed in time and the defendant extended the time for completion of work without imposing any penalty on the plaintiff. The plaintiff had also apprised the defendant and requested the Department to ask the electrical contractor to complete their work and also informed that delay being caused would be on account of Department. The plaintiff completed the work on 27.01.2010 and also informed the defendant no.2 vide letter dated 11.05.10 that they have completed the building long work but other agencies were executing the work and also in the process were damaging different items executed by plaintiff. The plaintiff also pleaded about the various letters sent by him to defendant Department regarding withholding his due amount, payment of his dues and also for handing over the building to the department. The plaintiff has claimed the loss suffered by it under various heads that is-
Rs. 550889/- on account of idle staff, labour, T&P and Machinery. Rs.245969/- on account of interest @18%p.a for Rs.5,00,774/- less paid in 4th R/A bill.
Rs. 1,59,087/- being interest @18% on account of late payment of running account bills.
Rs.10,000/- withheld amount in 4th R/A running amount bill. Rs. 575133/- on account of interest due to delay in payment of final bill.
Rs.6,54,959/- on account of interest @18%p.a for delay in release of security amount.
Page 3 of 27 Rs.1,45,372/- on account of interest @18%p.a for delay in release of earnest money.
Rs.1,98,978/- on account of payment of escalation under clause 10C. Rs.1,61,070/- on account of payment of escalation under clause 10CA Rs. 6,52,932/- on account of watch & ward of building. Rs.4,35,288/- on account of brooming, washing and house keeping charges of the building.
5. It is further the case of the plaintiff that the plaintiff had sent statutory notice under Section 477 and 478 of Delhi Municipal Corporation Act to the defendants on 24.12.18 mentioning the details of claims raised by them which was received by defendant nos. 1 and 2 however, no response was made by the defendants. Hence, the defendant company is liable to pay a sum of Rs. 37,89,677/- along with an interest @ 18% per annum to the plaintiff under the different heads.
6. The suit of the plaintiff has been contested by the defendants who in their joint written statement have inter alia taken the preliminary objections that the suit of the plaintiff is without any cause of action against the defendants and sheer mis-use of legal provisions and the devoid of any substance. Objection has also been taken that the suit of the plaintiff is time barred and not maintainable as final payment was made by defendant on 10.11.2015 and security amount was released on 02.12.2015 and after final payment and security amount, no further claim can be made.
Page 4 of 277. On merits, contents of the plaint are denied except those which are matter of record. In respect of payment under clause 10CA, it is pleaded that 10CA bill and all the differences were paid to plaintiff on 21.08.2012. In respect of the delayed payments etc, it is stated that on 10.11.2015, the 6th and final payment of plaintiff was paid on account of complete satisfaction of claim by plaintiff. It is further pleaded that the security amount as earnest money deposited was also released on 02.11.2015 and as per agreement, no further claim shall be made by contractor after submission of final bill and these shall be deemed to have been waived and extinguished. In reply to the para 19 pertaining to amount claimed under different heads, defendant has denied the contents of the claim. It is stated that plaintiff claim is not maintainable as the department has released the complete payment including differences, 10 CA and security amount and the plaintiff accepted the full and final payment of the entire satisfaction of his work done and thus, the prayer clauses of plaint are also wrong, false and liable to be denied.
8. In the replication the plaintiff has controverted the averments made in the written statement and reaffirmed the contents of plaint.
9. After completion of pleadings, admission/denial of documents was conducted and following issues were settled for consideration on 28.02.2022:
1. Whether the plaintiff is entitled for the recovery of any amount from the defendant company, if so, what amount? OPP.
2. Whether the plaintiff is entitled for any interest? If so, at what rate?Page 5 of 27
OPP.
3. Relief.
10. It is pertinent to mention here that though the defendants had also taken the objection that the suit is time barred and an application under Order VII Rule 11 CPC praying for rejection of the plaint on the said ground was also moved on behalf of defendants, however, the issue on the point of limitation was decided vide order dated 26.10.2021 vide which the application under Order VII Rule 11 CPC was dismissed and it was held that the suit is within the period of limitation.
11. It is also important to mention here that an application under Section 8 of Arbitration and Conciliation Act was also filed on behalf of defendants for rejecting the suit, at the stage of final arguments and counsel for defendants has also taken the objection in this regard in the written final arguments as well, however, the counsel for plaintiff along with the reply to application under Section 8 of Arbitration and Conciliation Act placed on record copy of order issued by MCD vide office order No.D/167/EE(P) III/06 dated 11.12.2006 whereby Ministry of Corporation of Delhi has decided that arbitration clause (Clause 25) in the various contract forms being adopted by MCD should be deleted from immediate effect. Though, Ld. Counsel for defendant sought time to verify the same, however, he did not dispute the office order afterwards and did not press on the application under Section 8 of the Arbitration and Conciliation Act. Even as per the contract for construction of Community Hall at Gokulpur Village, Shahdara Page 6 of 27 executed between the parties, Clause 25 has been struck off. Thus, the application under Section 8 of the Arbitration and Conciliation Act is dismissed.
12. In order to establish the claim of the plaintiff, evidence by way of affidavit of Sh. Purnanand, Director of plaintiff i.e. PW1 has been filed which has been tendered as PW1/A. PW1 has proved the following documents:
Copy of General Condition of Contract is Ex. PW1/1 (Colly); Copy of amendment General Condition of Contract is Ex. PW1/2; Copy of plaintiff letter dated 11.08.2011 is Ex. PW1/3; Copy of the plaintiff letter dated 12.09.2011 is Ex. PW1/4; Copy of plaintiff letter dated 10.10.2011 is Ex. PW1/5; Copy of plaintiff letter dated 03.11.2011 is Ex. PW1/6; Copy of plaintiff's letter dated 19.10.2015 is Ex. PW1/7; Copy of plaintiff's letter dated 17.04.2018 is Ex. PW1/8;Page 7 of 27
Copy of plaintiff's letter dated 19.10.2015 is Ex. PW1/9; Copy of defendant's letter dated 11.05.2018 is Ex. PW1/10 (Colly); Copy of plaintiff's letter dated 20.05.2018 is Ex. PW1/11; Copy of plaintiff's letter dated 04.06.2018 is Ex. PW1/12; and Non-Starter certificate is Ex. PW1/13.
13. On the other hand, Sh. Pramod Kumar Singh, Executive Engineer of defendant no.1 has been examined as DW1 on behalf of defendants whose evidence by way of affidavit has been tendered as Ex. DW1/A. DW1 has also tendered in evidence all the admitted documents which have also been relied by the plaintiff i.e., Ex.P1 to P31.
14. I have gone through the testimony of PW1 and DW1 and thoroughly perused the record.
15 I have also duly considered written arguments filed on behalf of both the parties and gone through the precedents and law on the point.
16. My findings are as under:
Issue No.1- Whether the plaintiff is entitled for the recovery of any amount from the defendant company, if so, what amount?
17. At the outset, there is no dispute that plaintiff was awarded work contract for construction of Community Hall, at Gokulpuri Village, Shah(North Zone), AC-46 and the contractual amount for construction was Rs.1,15,45,165/-. There is also no dispute that time for completion was 15 months and time was the essence of contract. It is also not disputed that work contract was to be governed by Standard General Conditions of Contract amended from time to time Ex. PW1/1(Colly).
18. The counsel for plaintiff has argued that there was delay in execution of work on the part of defendant due to which plaintiff had suffered loss on various accounts.
19. Per contra counsel for defendants has argued that defendants have already made all the payments to the plaintiff and the plaintiff has also received the entire payment including final payment without any objection.
He has also argued that as per Clause 9 of Ex.PW1/1(Colly), no further claim shall be made by the contractor after submission of the final bill and these shall be deemed to have been waived and extinguished.
20. From the evidence on record i.e., the admitted documents Ex.P5, Ex.P6 it is established that the hindrance was caused in the work as during excavation it was found that no hard strata was available till 2.70 metres as the land was filled with sludge and loose soil due to which the work had to be stopped for want of decision at the end of defendants. After that on 15.05.2008 the revised drawings were given according to which excavation upto 3.4 metres depth was done and as soon as the excavation was completed the earth from the sides fell down and also the adjacent houses seem to be in danger as the plot was back filled area.
21. Further from Ex.P7 it is revealed that the plaintiff informed the defendants that it had completed the structural work and brick work but the electrical contractor had not completed the work due to which he was unable to take up the plastering work. Vide letter Ex.P12 again the defendants were informed that the other agencies were still executing their work and damaging different items executed by him. There is also no dispute that extension was granted by EDMC twice for completion of work without any penalty on the plaintiff leading to the inference that the delay was not attributable to the plaintiff.
22. The plaintiff has claimed amount on following heads- I. Rs.5,50,889/- on account of ideal staff, labour, T & P and machinery-
23. Ld. Counsel for plaintiff has argued that the work had to be stopped due to fault and negligence of Department as a result of which the plaintiff's staff, labour, T&P and machinery remained ideal w.e.f 17.03.2008 to 15.06.2008. In this regard the plaintiff also wrote a letter to the Department in respect of which no response was received from the Department.
24. The plaintiff has also given the details of the salaries paid to the various categories of labour during the said period.
25. Ld. Counsel for plaintiff has placed reliance on the judgment of Apex Court in McDermott International Inc. Vs. Burn Standard Company & Ors., (2006) 11 SCC 181 and the judgment of Delhi High Court in Delhi Development Authority Vs. J S Chaudhary 2011 SCC Online Del 5098 in support of his arguments.
26. The judgment in McDermott International Inc (Supra) is on the point of grounds of interference under Section 34 of Arbitration and Conciliation Act. In the said judgment Ld. Arbitrator applied Edmen formula adopted by American Courts by calculating the loss of profit and overhead charges. The Apex Court did not interfere in the Award observing that there is nothing in Indian Law to show that any of the formula adopted in other countries is prohibited in law or the same would be in consistent with the law prevailing in India. It may be mentioned here that the ratio of judgment is not that the Courts in India should apply Edmen's formula. Thus, the cited judgment does not lay down any guidelines for ideal staff and labour, T&P and machinery.
27. In the judgment Delhi Development Authority (Supra) in para 34 of the judgment it has been observed:
"it was the case of respondent that because of prolongation of the contract due to the fault on the part of appellant, the respondent was made to incur the expenditure on ideal labour, staff, machinery, centering, shuttering and other ancillary requirements like electricity, water, petroleum etc. It was the case of the respondent that it was necessary for respondent to keep regular establishment including graduate engineer at the site till the work is completed as required under Clause 36 of the Agreement. The Arbitrator found that the respondent had in fact incurred expenditure on the aforesaid grounds and awarded a sum of Rs.5,000/- per month for the period of delay which was 44 months and on this basis a sum of Rs.2,20,000/- was awarded".
28. Hence, in the Delhi Development Authority (Supra) there was evidence on record to show that the contractor had to incur the expenses for the ideal staff, labour, machinery and other heads.
29. In the instant case, apart from the averment made in the plaint, the plaintiff has not adduced any evidence to prove if he actually had engaged the various categories of labour and paid them salaries even during the time the work remained stopped. In the absence of any evidence to prove the actual payments made by him to the various categories of labour, he is not entitled for any amount under this head.
II. Rs.2,45,969/- on account of interest @ 18% on Rs.5,00,774/- less paid in fourth running account bill-
30. Ld. Counsel for plaintiff has argued that the amount of fourth running account bill was Rs.45,09,534.00. However, the same was restricted to Rs.40,08,760/. Thus, an amount of Rs.5,00,774/ was paid less to the plaintiff on 30.03.2010 and the same was paid to the plaintiff along with fifth running bill only on 21.12.2012. Hence, a sum of Rs.5,00,774/ remained withheld by the defendants' Department w.e.f 30.03.2010 to 21.12.2012 i.e., for 996 days. Thus, the plaintiff is entitled for an interest @ 18% per annum on the said amount for the delayed payment.
31. In this regard the plaintiff had also vide letter dated 12.05.2010 Ex.P13 wrote to the Executive Engineer and requested to release the amount failing which the Department shall be liable to pay interest @ 18% per annum.
32. Letter Ex.P13 is admitted document in which the plaintiff has claimed the amount withheld in the last bill.
33. Though the Ld. Counsel for defendants has argued that the plaintiff has accepted the amount without any objection, however, the contention of Ld. Counsel for defendant is not tanable. In the judgment titled R L Kalathia and Company Vs. State of Gujarat (2011) 2 SCC 400 it was held by the Apex Court "13. From the above conclusions from this Court following principles emerge
(i) Merely because the contractor has issued "no dues certificate", if there is an acceptable claim, the court cannot reject the same on the issuance of no dues certificate.
(ii) In as much as it is common that unless a discharge certificate is given in advance by the contractor , payment of bills are generally delayed, hence such a clause in the contract would not be an absolute bar to the contractor raising claims which are genuine at a later date even after submission of such "no claim certificate".
(iii) Even after execution of full and final discharge voucher/receipt by one of the parties, if the said party is able to establish that he is entitled to further amount for which he is having adequate materials, he is not barred from claiming such amount merely because of acceptance of the final bill by mentioning "without prejudice" or by issuing "no dues certificate".
34. Though the plaintiff has claimed interest @ 18% per annum on the delayed payment, however, he has not given the basis on which interest @ 18% has been claimed.
35. It is relevant to mention here that in the judgment of Hon'ble Delhi High Court in EDMC Vs. Raj Kumar Jain RFA No. 397/2017, NDMC Vs. Vipin Gupta RFA No.160/2017 wherein Hon'ble High Court extensively dealt with the various clauses i.e., Clause 7, 9, amended Clause 9, Clause 17 and 45 of the Agreement between EDMC / NDMC and the Contractors, an interest @ 8% per annum was awarded for the delayed payments. Accordingly, a sum of Rs.1,09,319.65 being interest @ 8% per annum on Rs.5,00,774/ for the delayed period of 996 days is awarded to the plaintiff.
III. Rs. 1,59,087/ being interest @ 18% per annum on account of late payment of running account bills
36. Clause 7 of Standard General Conditions of Contract (GCC) provides "............... Payment on account of amount admissible shall be made by the Engineer Incharge certifying the sum to which the contractor is considered entitled by way of interim payment at such rates as decided by Engineer Incharge. The amount admissible shall be paid by 10th working day after the day of presentation of the bill by contractor to the Engineer Incharge or his assistant Engineer together with account of material is issued by department or dismantled materials, if any".
37. Defendant has filed the detailed statement of the running bills and the payments made by contractor in respect of work order. From the statement it is revealed that there is delay of more than ten days in making the payments against the bills submitted by the contractor. Though the plaintiff has claimed interest @ 18% for late payment, however, as already discussed since the plaintiff has not given the basis on which interest @ 18% is claimed and in view of the judgment passed by High Court of Delhi in EDMC Vs. Raj Kumar Jain RFA No. 397/2017, NDMC Vs. Vipin Gupta RFA No.160/2017 the plaintiff is entitled for an interest @ 8% on account of delayed payment of running bills.
38. There is a delay of 25 days in payment of the first running bill amounting to Rs.34,42,429/- . Thus, as per calculation the plaintiff is entitled for a sum of Rs.18,863/- on account of delay. There is a delay of 14 days in payment of second bill amounting to Rs.10,03,268/-. Thus, the plaintiff is entitled for a sum of Rs.3,078/- on account of delay. There is a delay of 62 days in payment of third bill amounting to Rs.23,41,177/-. Thus, the plaintiff is entitled for a sum of Rs.31,814/- on account of delay. There is a delay of 22 days in payment of fourth bill amounting to Rs.35,15,176/-. Thus, the plaintiff is entitled for a sum of Rs.16,950/- on account of delay.
39. Accordingly, a sum of Rs.70,705/- on account of delay in payment of running account bills is awarded to the plaintiff.
IV. Rs. 10,000/ withheld in running account bill
40. Ld. Counsel for plaintiff has argued that the fourth running account bill vide MB40491 which has been filed by the defendants themselves shows that a sum of Rs.10,000/- was withheld by the defendant.
41. When DW-1 in his cross-examination, was confronted with the fourth running account bill, he deposed that he did not remember if Rs.10,000/- has been paid back to the plaintiff. DW-1 has failed to show anything on record to prove that the withheld amount was ever paid back to the defendant. The fourth bill was passed on 22.02.2010, thus the plaintiff is entitled for the withheld amount along with interest @ 8% per annum. The plaintiff has also claimed the withheld amount from the defendants vide its letter Ex.PW1/8 which has been duly sent to the defendants by speed post and thus deemed to have been served in view of provisions under Section 114 of Indian Evidence Act and Section 27 of General Clauses Act.
42. Thus, plaintiff is awarded Rs.10,000/- + Rs.7,200/-(being interest @ 8% per annum for 108 months i.e., till the date of filing of the suit) = Rs.17,200/- on account of withheld amount in the fourth running account bill.
V. Rs. 5,75,133/ on account of interest due to delay in payment of final bill
43. Ld. Counsel for plaintiff has argued that the work was completed on 25.01.2010 and hence the final bill should have been paid by 31.10.2010 by the defendants' department but the payment was made as under- a. Fifth running account bill (Pre-final) paid on 21.12.2012 amounting to Rs.13,70,759/-;
b. Sixth and final bill paid on 25.02.2016 amounting to Rs.50,000/-.
44. The Executive Engineer was requested to pay the final bill with interest vide the letters dated 17.04.2012 i.e., Ex.P-18, 20.07.2012 i.e., Ex. P-19, 09.04.2013 i.e., Ex.P-20, 15.04.2013 i.e., Ex.P-21 and 12.10.2014 i.e., Ex.P-23, however, no payment was made. Ld. Counsel for plaintiff has calculated sum of Rs.5,46,506/-on account of delay in payment of pre final bill and a sum of Rs.28,627/- on account of delay in payment of final bill @ 18% per annum.
45. Clause 9 of the General Conditions of Contract deals with payment of final bill which runs as under-
"The final bill shall be submitted by the contractor in the same manner as specified in interim bills within three months of physical completion of work or within one month of the date of final certificate completion furnished by Engineer Incharge whichever is earlier. No further claims shall be made by contractor after submission of the final bill and these shall be deemed to have been waived and extinguished. Payment of those items of the bill in respect of which there is no dispute and of items in dispute, for quantities and rates as approved by Engineer Incharge, as far as possible be made within period specified herein under , the period being reckoned from the date of receipt of bill by Engineer Incharge or his authorised Assistant Engineer, complete with account of materials issued by the Department and dismantle materials i. If the tendered value of work is upto Rs.5 lakhs; 3 months. ii. If the tendered value of work exceeds Rs. 5 lakhs; 6 months."
46. From the fifth bill it is revealed that the same has been passed by the defendants on 03.12.2012. The plaintiff has not specified as to when the Vth and final bill were submitted to the defendants for clearing.
47. As per Clause 9, the period is to be calculated from the submission of final bill and not from the date of completion of the work. The amount of final bill is payable as per Clause 9 w.e.f expiry of six months after the submission of the bill. The fifth and final bill on record do not mention the date of submission of the bill. In the facts and circumstances, considering that the work was completed on 25.01.2010 and the first notice for demand of final payment was given on 17.04.2012 vide Ex.P-18, the plaintiff can at the most be awarded interest on the delayed payment w.e.f the date of notice. Payment of the fifth running account bill of Rs.13,70,759/- was made on 21.12.2012 i.e., after about eight months of service of notice. Hence, a sum of Rs.73,110/- (rounded off) being interest at a rate of 8% for delay of about eight months in payment of running account bill is awarded to plaintiff. The final bill has been released on 10.11.2015. Accordingly, a sum of Rs. 13,231/- (being interest @ 8% per annum on the final bill of Rs.50,000/- for period of 43 months) is awarded on account of interest due to delay in payment of final bill. Accordingly, a sum of Rs.86,340/- (rounded off) is award in this head.
VI. Rs. 6,54,959/ being interest @ 18% on account of delay in release of security amount VII. Rs. 1,45,372/ being interest @ 18% on account of delay in release of earnest money deposited
48. Ld. Counsel for plaintiff has argued that the work was completed on 25.01.2010 and the defect liability period of one year also expired on 24.01.2011. As such the security and earnest money should have been released on 25.01.2011 but the same were released on 07.01.2016 and 16.02.2016 respectively. Thus, there is a delay of 1807 days in payment of the security amount and 1847 days in release of earnest money. The plaintiff had also sent letters Ex.P-18, Ex. P-19, Ex.P-20 and Ex.P-21, for refund of security however, there was no response to the letters.
49. Clause 45 of the General Conditions of Contract deals with release of security deposit after labour clearance which runs as under-
"The security deposit of the work shall not be refunded till the contractor produces the clearance certificate from the labour officer. As soon as the work is virtually complete the contractor shall apply for clearance certificate from labour officer under intimation to Engineer Incharge. The Engineer Incharge on receipt of said communication shall write to labour officer to intimate if any complaint is pending against the contractor in respect of the work. If no complaint is pending on record till after three months after completion of the work and/or no communication is received from labour officer to this effect till six months after the date of completion it will be deemed to have received the clearance certificate and the security deposit will be released if otherwise due ."
50. Clause 17 of the General Conditions of Contract deals with contractor liability for damages, defects during maintainance period. It interalia provides that the security deposit of contractor except the portion pertaining to asthaltic work which is governed by sub para (iii) of Clause 35 shall not be refunded before expiry of six months after issue of certificate final or otherwise, of completion of work, or till the final bill has been prepared and passed whichever is later.
51. Further sub para (iii) of Clause 35 provides that the contractor shall be responsible for rectifying defects noticed within a year from date of completion of the work and the portion of security deposit relating to asphalatic work shall be refunded after expiry of this period.
52. The plaintiff has not adduced any evidence with regard to the clearance from the labour officer and regarding the portion of security deposit relating to asphalatic work. In the judgments passed by High Court of Delhi in EDMC Vs. Raj Kumar Jain RFA No. 397/2017, NDMC Vs. Vipin Gupta RFA No.160/2017 (Supra),guidelines were laid down by the High Court of Delhi. Para 75 (h) runs as under-
"(h) The security amount/earnest money deposited would be refundable upon fulfillment of conditions contained in Clause 17 and Clause 45 of General Conditions of Contract. Interest would be payable on delayed payment".
53. In the said case Hon'ble High Court modified the decree passed by the trial court under Order 12 Rule 6 CPC with regard to interest in so far as refund of security amount is concerned. It was observed by Hon'ble High Court that as the record did not reflect either compliance or non- compliance of Clause 17 and 45 of General Conditions of Contract, the interest on security amount was granted only from the date of filing the suit.
54. In the instant case also since there is no evidence with regard to compliance of Clause 17 and 45 of General Conditions of Contract, no interest can be awarded on the security as claimed. At the most the interest can be awarded w.e.f the date of passing the final bill as provided in Clause
17. As per evidence on record, the final bill of Rs.50,000/- was passed on 09.11.2015 whereas the security bill was passed on 04.12.2015 and was released on 07.01.2016 and the earnest money bill was passed on 04.12.2015 and the payment was released on 16.02.2016. Thus, there is a delay of 59 days in release of security amount and 97 days in release earnest money. The security amount paid by the plaintiff was Rs.7,34,981/-. Thus, the plaintiff is entitled for a sum of Rs.9,504/- (being interest @ 8% per annum on the security amount of Rs.7,34,981/- for the delayed period of 59 days) towards delay in release of security amount. The earnest money paid by the defendant was Rs.1,59,600/-. Thus, the plaintiff is entitled for a sum of Rs.3,393/- (being interest 8% per annum on the earnest money of Rs.1,59,600/- for the delayed period of 97 days) towards the earnest money.
VIII. Rs. 1,98,978 on account of payment of escalation under Clause 10 C IX. Rs.1,61,070/ on account of payment of escalation under Clause 10 C A
55. Ld. Counsel for plaintiff has argued that during execution of work minimum wages payable to the worker were revised by the Government from time to time. Accordingly, the plaintiff had to pay the wages to the workers as per the revised rates. Furthermore, the delay in completion of the work is attributed to the department. The first escalation bill upto third running account bill was submitted to defendant no.2 vide letter dated 12.03.2012 and second bill was submitted on 19.10.2015 but no payment has been made by the plaintiff till the day under Clause 10 C.
56. Further, during the execution of the work the prices of cement also increased in comparison to the prices at the time of submission of the tender. The first escalation bill was submitted to respondent no.2 on 12.02.2012 and the second bill was submitted on 19.10.2015. However, respondent no.2 has paid only a sum of Rs.5,94,554/- on 21.12.2012 for cement and steel consumed upto third running account bill. Balance amount of Rs.1,61,070/- still remained to be paid under Clause 10 CA.
57. Clause 10CA of Standard General Conditions of Contract provides that if after submission of tender, the price of any material incorporated in the works and/or wages of labour increases as a direct result of coming into force of a fresh law or statutory rule or order and such increase exceeds 10% of the price and/or wages prevailing at the time last stipulated date for receipt of tenders including extensions if any, for work and the contractor thereupon necessarily and properly pays in respect of that material. Such increased price and/or in respect of labour of execution of work, such increased wages then the amount of the contract shall accordingly be varied provided always that increase so payable, is not, in the opinion of superintending engineer attributable to any delay in execution of contract within the control of contractor. It further provides that no reimbursement shall be made if increase is not more than 10% of the said prices /wages and if so, the reimbursement shall be made only on the excess over 10% and provided further, that any such increase shall not be payable if such, increase become operative after the contract or extended day of completion of work in question. It further provides that contractor shall for the purpose of this condition, keep such books of account and other documents as are necessary to show the amount of any increase claimed or reduction available and shall allow inspection of the same by a duly authorized representative of MCD and further, shall, at the request of engineer in charge may require any document so kept and such other information as the engineer in charge may require. It further provides that contractor shall within a reasonable time of his becoming aware of any alteration in the price of such material and/or wages of labour give notice thereof to engineer in charge stating that same has been given pursuant to this condition together with all information relating thereto which he may be in position to supply.
58. The plaintiff has failed to prove that any such notice containing all information relating to alteration of price of material or wages of labor was ever issued by him to the defendant. As per Clause 10 C the plaintiff is required to issue the notice containing all information within the reasonable time to the engineer in charge, however the plaintiff has failed to issue any such notice during the period when the work was in progress. However, the plaintiff has filed the escalation statement under Clause 10C for first, third , fourth to sixth and final running account bill which is admitted document and marked as Ex.P-29 as well as escalation statement under Clause 10 C A which is also admitted document and marked as Ex.P-30. Ex. P-29 itself does not show any amount outstanding under Clause 10 C nor the counsel for plaintiff has explained as to how the amount claimed by him is outstanding as per the statement Ex.P-29. However, the escalation statement under Clause 10 C A Ex. P-30 establishes that out of a total sum of Rs.7,14,956.83 claimed by the plaintiff under Clause 10 C A only a sum of Rs.5,70,579/- has been paid to the plaintiff and a sum of Rs.1,44,378/- is outstanding.
59. Thus, the plaintiff is entitled for a sum of Rs.1,44,378/- towards payment of escalation under Clause 10 C A. X. Rs.6,52,932/ on account of Watch and ward of the building
60. Ld. Counsel for the plaintiff has argued that the work was declared physically completed on 25.01.2010. Defendant no.2 vide letters dated 06.05.2011 Ex.P-14 had intimated that the building shall be handed over to CSI department on 06.02.2011 but nobody came to take over the building. The said fact was intimated to Executive Engineer vide plaintiff's letter 14.06.2011 Ex.P-15. The plaintiff requested the defendant no.2 to pay watch and ward of the building vide its letter dated 11.08.2011 i.e., Ex.PW1/3 and subsequently reminded vide letters dated 12.09.2011 Ex.PW1/4, 10.10.2011 Ex.PW1/5 and 03.11.2011 Ex.PW1/6 through registered post and thus have been deemed to be served. Finally the bill was inaugurated and handed over on 24.11.2011. As such the plaintiff provided the service of watch and ward for 22 months i.e., for 662 days.
61. The plaintiff had to incur expenses on watch and ward to protect the building from anti social elements and thus incurred expenses by keeping the security staff in three shifts and paid Rs.10,000/- to each of the security guards.
62. Merely by raising the claim under the said head, the plaintiff does not become entitled to any amount since the plaintiff also failed to produce any evidence in the form of his statement of account, the total number of security guards engaged by him, the wages paid by him on account of watch and ward to them. In the absence of any evidence on record, the plaintiff is not entitled for any amount under this head.
XI. Rs.4,35,288/ on account of grooming, washing and housekeeing charges of the building
63. Ld. Counsel for the plaintiff has argued that during the period the building was not taken over by the defendants. The plaintiff provided the services of housekeeping and incurred expenses @ Rs.20,000/-. No evidence has been produced by the plaintiff to prove that he actually had to engage any housekeeping staff for maintenance of building.
64. Merely by raising the claim under the said head, the plaintiff does not become entitled to any amount. Since the plaintiff failed to produce any evidence in the form of his statement of account, the total number of sweepers/staff engaged by him, the wages paid by him on account of housekeeping charges of the building, the plaintiff is not entitled for any amount under this head.
65. Accordingly, the plaintiff is entitled for recovery of total sum of Rs. Rs.1,09,319.65 + Rs. 70,705/- + Rs. 17,200/- + Rs.86,340/- + Rs.9,504/- + Rs.3,393/- + Rs.1,44,378/- = Rs.4,40,840/-(round off) from the defendants.
Issue no. 1 is decided accordingly.
Issue no. 2- Whether the plaintiff is entitled for any interest? If so, at what rate?
66. The plaintiff has not lead any evidence on the point of entitlement of pendente lite and future interest nor any arguments have been advanced on the same. Hence, relying on the judgments of Hon'ble High Court in EDMC Vs. Raj Kumar Jain RFA No. 397/2017, NDMC Vs. Vipin Gupta RFA No.160/2017(Supra), I award pendente lite and future interest @8% per annum on awarded amount of Rs.4,40,840/-.
Issue no. 2 is decided accordingly.
Issue no. 3- Relief
67. In view of my finding on above issues, suit of the plaintiff is decreed for a sum of Rs. 4,40,840/- (round off) along with pendente lite and future interest @ 8% p.a with effect from date of filing of suit till the date of realization.
Decree sheet be prepared accordingly.
File be consigned to record room after due compliance.
Announced in the open Court On 9th day of 2022.
(Sukhvinder Kaur) District Judge, Commercial Court-02 Shahdara, Karkardooma 09.06.2022