Delhi District Court
Vanguard Security & Fire Services (P) ... vs . M/S National Building Construction ... on 31 May, 2016
Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr
IN THE COURT OF DR. AJAY GULATI, ADDL. DISTRICT JUDGE,
ROOM NO. 606, SAKET COURTS, SOUTH DISTRICT,
NEW DELHI
In the matter of
Suit No.95/16
Case ID No.02406C0022242011
Vanguard Security and Fire Services (P) Ltd.
D102, "PURVASHA"
Anandlok, Mayur Vihar PhaseI,
Delhi110091. .............. Plaintiff
VERSUS
1.M/s National Building Construction Corporation Ltd. Through Managing Director, Integrated Office Complex Ispat Bhawan, Lodhi Road, New Delhi.
2. Joint Management Committee Through Chairman NBCC Ltd, Management Unit (JMC) Integrated Office Complex, Lodhi Road, New Delhi.
............Defendants
Date of institution of Suit : 31.03.2010
Date on which order was reserved : 26.05.2016
Date of Judgment : 31.05.2016
Decision : Dismissed
Suit No.95/16 Page 1 of 25
Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr SUIT FOR RECOVERY OF RS. 7,99,466.89P
1. The present suit was filed by the plaintiff which is a private limited company and is in the business of providing security, fire fighting and ancilliary services. The suit was filed through its Managing Director, who was duly authorized to institute the suit. The dispute leading to filing of the present suit arose when the plaintiff company was not given its due/agreed charges by the defendants for providing security services in the peripheral area of the integrated office complex of the defendant at Lodhi Road, New Delhi. Thereafter, the dispute was referred to a dispute settlement mechanism under the agreement dated 30.05.2000 signed between the plaintiff and the defendant No.1. The report (dated 26.02.2004) of the dispute settlement officer was returned in favour of the plaintiff company. The said report was sought to be executed by the plaintiff as though it was an Arbitral Award but the same was declined by the court of Ld. ADJ. Thereafter, the present suit was filed relying on the finding given on the report referred to above.
Brief facts necessary for understanding the context of the dispute are as follows:
2. As per the averments in the plaint, plaintiff was awarded a contract for providing security services in its office by Steel Authority of India Ltd (SAIL) for three years w.e.f 01.08.1991 at Suit No.95/16 Page 2 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr the integrated office complex on Lodhi Road, New Delhi. Defendant No.1 was also an occupant in the integrated office complex at Lodhi Road and contracted with the plaintiff for providing peripheral security services on the same terms and conditions as offered by the SAIL. Plaintiffs were awarded the contract by the defendants w.e.f 01.09.1992 and the schedule of rates incorporated the same charges as were being paid to the plaintiff by the SAIL. The plaintiff further averred in the plaint that the plaintiff supplied uninterrupted security and peripheral services to the defendants from 01.09.1992 till 31.01.2003, when their services were dispensed with after giving one month notice i.e plaintiff's services were deemed to be discontinued, w.e.f 28.02.2003. It is the claim of the plaintiff that from 01.09.1992 to 31.03.2000, the defendants were paying the same charges to the plaintiff as were being paid by SAIL to the plaintiff since the charges, as revised by SAIL from time to time, were always incorporated by the defendant in its contract with the plaintiff i.e. schedule of rates.
3. From 01.04.2000 defendants stopped paying increased service charges/rates as were being paid by the SAIL. It is the claim of the plaintiff that the joint management committee which is defendant no.2 never informed the plaintiff that hence forth they shall not be paying the charges as paid by the SAIL. However, the plaintiff was given to understand that its services were being engaged on the same terms and conditions as before.
Suit No.95/16 Page 3 of 25Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr The last agreement signed by the plaintiff with the defendant was on 30.05.2000 and though it was without any quotation from the plaintiff, contract was signed on the tacit understanding that the rates would be same as agreed to by the SAIL in its latest agreement signed on 01.04.2000 with the plaintiff. It is not in dispute that although the last agreement dated 30.05.2000 was enforced till 31.03.2001 but the defendants have availed the services of the plaintiff till 31.01.2003. The plaintiff also claimed that the defendants did not pay service tax to the plaintiff, although it was a statutory requirement. Consequently, the plaintiff claimed by way of present suit difference of charges (inclusive of service tax) between what was paid by the defendant from 01.04.2000 till 31.01.2003 and the charges as have been paid by the SAIL to the plaintiff, and compensation for short termination of the contract with one month notice whereas, as per the contract, the notice period should have been three months. Consequently, the plaintiff has prayed for passing a decree of Rs.7,99,466.89/ alongwith interest pendentlite as well as future interest from the defendants. This amount was worked out by the plaintiff after the report dated 26.02.2004 returned a finding in favour of the plaintiff.
4. On putting in appearance, the defendants took a number of preliminary objections in their joint written statement which included referring the matter for arbitration, the suit being Suit No.95/16 Page 4 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr barred by principle of resjudicata, that the plaint was liable to be rejected as it did not disclose the cause of action and finally that the plaint had not been instituted by a competent person.
5. On merits, the defendants submitted that defendants never agreed to pay charges as paid by SAIL to the plaintiff at any point of time. It was even denied that the plaintiff was ever engaged for providing security, fire fighting and accessory services from 01.09.1992 to 29.05.2000. However, the defendants admitted that plaintiff was contracted for providing surveillance, fire fighting services and general upkeep services from 30.5.2000. The defendant further submitted that even though the agreement dated 30.05.2000 expired after a period of one year but the plaintiff continued to accept payments at the same rates as before for services provided by it beyond the period of one year. It was also submitted by the defendant that no service tax was liable to be paid to the plaintiff and defendant was only required to give one month notice before termination of services of the plaintiff as per the agreement dated 30.05.2000. The defendant admits that in terms of clause 3 of the agreement dated 30.05.2000, dispute settlement mechanism was invoked by the plaintiff pursuant to which Sh. S.P. Kumar was appointed as the Dispute Settlement Officer, who submitted his report on 26.02.2004. It was finally submitted by the defendant that the report dated 26.02.2004 given by Sh. S.P. Kumar is neither an arbitral award nor a binding report but Suit No.95/16 Page 5 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr merely a recommendation which could not be enforced by the plaintiff.
6. Replication was filed by the plaintiff wherein the preliminary objections raised by the defendant were controverted and averments in the plaint were reiterated.
7. After the pleadings of the parties were complete, following issues were framed for adjudication on 18.02.2011:
1. Whether Sh. S.C. Jain, Managing Director, is competent & authorized person to sign, verify the plaint and to institute the suit? OPP 2.1 Whether the suit is within limitation? OPP.
2.2 Whether the suit is barred by time, (under article 7 of Schedule appended to the Limitation Ac)? OPD 1 & 2.
3. Whether the suit is barred by Section 11 of CPC on the principle of resjudicata? OPD 1 & 2.
4. Whether the suit is bad for misjoinder of defendant no.1, if so, its consequences? OPD1.
5. Whether the suit is without cause of action? OPD 1 & 2.
6. Whether the plaintiff is entitled for Suit No.95/16 Page 6 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr decree of Rs.7,99,466.89p/ against the defendant? OPP
7. Whether the plaintiff is entitled for decree of interest @ 12% p.a.? OPP.
8. Relief.
EVIDENCE ADDUCED On behalf of the plaintiff
8. In its evidence, the plaintiff examined only one witness i.e. Sh. S. C. Jain, Managing Director as PW1, who deposed on the lines of the plaint. He tendered his evidence by way of affidavit A1. In order to prove its claim, plaintiff relied on a number of documents, the relevant ones being as follows:
Sl. No. Documents relied Exhibit Remark
upon
1. Agreement dated PW1/7 Signed between the plaintiff and
30.05.2000 defendant No.1
2. Notice dated PW1/1 Vide which the services of the plaintiff
30.01.2003 were terminated by giving one month
notice
3. Letter dated PW1/8 Vide which the plaintiff requested the
31.03.2003 defendant to appoint an officer under
Clause3 of the Agreement dated
30.05.2000 to resolve the differences
that arose between plaintiff and
defendant regarding due charges to be
paid, notice period and compensation
for withholding payment.
4. Letter dated PW1/9, Vide which Sh.S.P. Kumar was
Suit No.95/16 Page 7 of 25
Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr 17.5.2003 also marked appointed under part 2 of clause 3 of as PW1/15 the agreement dated 30.5.2000.
5. Report submitted PW1/12 The report was given in favour of the by Sh. S.P. Kumar plaintiff.
which is dated 26.02.2004.
6. Letter dated PW1/10 Letter written by plaintiff to the 12.3.2004 defendant No.2 asking them to request Sh. S. P. Kumar to expedite the award.
7. Letter dated PW1/11 Letter written by the plaintiff to the 22.03.2004 defendant No.2 requesting it to implement the award/report.
8. Calculation Chart PW1/6 Given by plaintiff to defendant dated 8.7.2004 showing the details of amount claimed by plaintiff from defendant.
9. Certified copy of PW1/18 Vide which execution petition filed by judgment dated the plaintiff to enforce the report 27.4.2007 dated 26.2.2004(Ex.PW1/12) as an arbitral award was dismissed.
9. On behalf of the defendant
9. On the other hand, defendant also examined only one witness, Sh. J. M. Singh, DGM (JMC Maintenance Unit) as DW 1, who reiterated the averments made in the Written Statement and relied on the following documents:
Sl. No. Documents relied Exhibit Remark
upon
1. Letter dated DW1/1 Letter giving one month notice
30.01.2003 vide which services of the
plaintiff were terminated by the
defendant No.2
2. Letter dated DW1/2(already Regarding appointment of an
17.5.2003 exhibited as officer under clause 3 of the
Ex.PW1/9 and agreement made between
Suit No.95/16 Page 8 of 25
Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr Ex.PW1/15) NBCC and M/s Vanguard Security & Fire Services (P) Ltd.
10. I have heard the Learned counsel for the parties and have carefully gone through the material available on record.
11. Before I go on to decide the issues on merit, it is important to clarify the legal status of defendant no.2 and its relationship with JMC i.e Joint Management Committee. JMC is a body comprised of officers/nominees from four PSU's which have their offices located in the Integrated Office Complex (IOC) at Lodhi Road. These are SAIL, NBCC, BHEL and HUDCO. However, the Joint Maintenance Unit of NBCC Ltd, is comprised of Officers/officials exclusively from NBCC Ltd. This is clear from the cross examination of DW1. Defendant no. 2 is sought to proceeded against through the Chairman of Joint Maintenance Unit of NBCC Ltd. In effect, it appears that both defendant no. 1 and 2 are in essence the same entity, or atleast that is the understanding of the Court. Even Written Statement was filed jointly on behalf of defendant No.1 & 2. While appearing as DW, the witness was marked as DW1 and not as D1W1 or D2W1.
FINDINGS
12. My issuewise findings are as under. However, the issues are not being adjudicated in seriatim.
Suit No.95/16 Page 9 of 25Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr ISSUE NO.1 Whether Sh. S.C. Jain, Managing Director, is competent & authorized person to sign, verify the plaint and to institute the suit? OPP
13. Plaintiff has placed on record the authorization dated 26.12.2005 in favour of Sh. S.C. Jain, who is the Managing Director of the plaintiff company to institute and conduct legal proceedings on behalf of the plaintiff company. The said document has been exhibited as Ex.PW1/1. In cross examination there is no question put to Sh. S.C. Jain, when he appeared as PW1, as to whether he has the authority to file the plaint in the name of plaintiff company. The document Ex.PW1/1 goes uncontroverted and hence, this issue is decided in favour of the plaintiff.
ISSUE NO.3 Whether the suit is barred by Section 11 of CPC on the principle of resjudicata? OPD 1 & 2
14. Learned counsel for the defendant has argued that the issue of whether or not the plaintiff is entitled to the claimed amount (in the present suit) on the strength of report dated 26.02.2004, was directly and substantially in issue before the Suit No.95/16 Page 10 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr court of Learned ADJ in the execution petition filed earlier by the plaintiff. The Learned ADJ held that the report dated 26.02.2004 was not executable as an arbitral award and hence dismissed the execution petition. Learned counsel thus contends that the right of the plaintiff to claim the amount as per the report dated 26.02.2004 having been decided by the court of Learned ADJ, the same issue cannot be agitated again by way of filing the present suit.
15. The contention of the Learned counsel for the defendant is not acceptable for the following reason. The previous court did not give a finding on the issue of whether the plaintiff is entitled to claim the amount on the basis of report dated 26.02.2004. The previous judgment merely clarified the legal status of the report dated 26.02.2004 and held it not to be an arbitral award, which could be enforced by way of an execution petition. There is no finding to the effect that plaintiff cannot claim any amount under the report dated 26.02.2004. Hence, this issue is decided against the defendant No.1 & 2.
16. That apart, even the judgment dated 27.04.2007 held that the report dated 26.02.2004 is binding on the parties. So if the defendant takes the plea of resjudicata, the finding of court regarding binding nature of the report also stands and works against the defendant.
Suit No.95/16 Page 11 of 25Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr ISSUE NO.4 Whether the suit is bad for misjoinder of defendant no.1, if so, its consequences? OPD1
17. The present suit cannot be held to be bad for misjoinder of defendant No.1 because the agreement dated 30.05.2000 was entered between defendant No.1 and the plaintiff, as is clear from the language of the said agreement. The right of the plaintiff to claim the suit amount flows from agreement dated 30.05.2000, pursuant to which report dated 26.02.2004 was given. Even otherwise, as per the of the Code of Civil Procedure, 1908, suit cannot be held to be bad for misjoinder of parties. It can only be held to be bad for nonjoinder of necessary party/ies. Accordingly, this issue is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 5, 6 & 75. Whether the suit is without cause of action? OPD 1 & 2
6. Whether the plaintiff is entitled for decree of Rs.7,99,466.89p/ against the defendant? OPP
7. Whether the plaintiff is entitled for decree of interest @ 12% p.a.? OPP
18. Since these issues are intertwined, they are being taken up Suit No.95/16 Page 12 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr together. The decision on two issues i.e. whether the suit is without any cause of action and whether plaintiff is entitled to the decree of Rs.7,99,466.89/ rests on addressing two questions. Firstly, what is the status of the report dated 26.02.2004 given by Sh. S. P. Kumar pursuant to invoking para 2 of the clause no.3 of agreement dated 30.5.2000 which was signed by the plaintiff with the defendant? Secondly, which course of action is to be pursued by the plaintiff for enforcing its rights, if any, under the said report?
19. Taking up the first question, it needs to be appreciated that clause 3 is a part of the Agreement dated 30.05.2000 which was entered into between the plaintiff and defendant No.1. The agreement was a formal contract and thus enforceable and binding under law. Its enforceability and binding nature is deemed to have been accepted unconditionally by both the parties when the plaintiff invoked clause 3 of the agreement and relying on 2nd para of this clause, the defendant appointed an officer to deal with any difference or doubt pertaining to meaning, interpretation of any phrase/word used in terms or in schedule of services, their nature and manner of rendering such services. A bare reading of the relevant Clause 3 itself shows that any decision given pursuant to 2 nd para of the said clause shall be binding. Even the judgment dated 27.04.2007 i.e. Ex.PW1/18 passed by the court of Learned ADJ, dismissing execution petition of plaintiff, which initially tried to enforce the Suit No.95/16 Page 13 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr report dated 26.02.2004 as an arbitral award, categorically mentions that the said report is binding on the parties. That judgment has not been assailed by either party.
20. While controverting the plea of the binding nature of report dated 26.02.2004, Learned Counsel for the defendant had a singular line of defence that the said report was only recommendatory in nature and not binding. However, the Learned Counsel has not been able to substantiate his argument from any corner. The plain language of the agreement is clear. There is nothing to even remotely suggest from the examination in chief or cross examination of either PW or DW that the said report is recommendatory in nature. In para 14 of his affidavit Ex.DW1/A, DW1 submits that since the report dated 26.02.2004 was contrary to the terms of reference, therefore, it is not binding upon defendants. Thus, there is not even an averment in the evidence (by way of affidavit) that the report dated 26.02.2004 had no binding value per se. If the defendants considered the said report to be non binding since it was contrary to the terms of reference, they should have assailed it. However, there was complete inaction on the part of the defendants to challenge the findings of Sh. S. P. Kumar.
21. Strangely enough, the defendants opposed the petition filed by the plaintiff to execute the award report dated 26.02.2004 by raising an objection that the same is not an arbitral award and hence not executable. The plea was accepted Suit No.95/16 Page 14 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr by the Trial Court. However, when the present suit was filed, the first plea taken by the defendants was that the matter should be referred to Arbitration in terms of clause 3 of the agreement dated 30.05.2000. However, the plea was disallowed for the reason that the report dated 26.02.2004 deals with an excepted matter which is excluded from the purview of arbitration clause. This fact has been highlighted for 3 reasons. Firstly, by submitting an application for referring the dispute in the present suit to arbitration, the defendant by its act and conduct affirmed the binding nature of agreement dated 30.05.2000 and clause 3 specifically. It has already been highlighted above that even the 'finding' by the officer concerned in regard to a matter referred under part 2 of clause 3 was to be final and binding. Secondly, by asking for a reference to arbitration, the defendant has shown that it had no intention to honour the award report dated 26.02.2004 keeping in view that it had successfully opposed the execution of the said report as an arbitral award. Thirdly, the order dated 06.12.2010, vide which the application for referring the matter to arbitration was disallowed, itself observes that the report dated 26.02.2004 is binding and final. That order was not challenged by the defendant as a result of which it became final. This, in the understanding of the court, constitutes issue estoppel and the defendant cannot be permitted to challenge the binding nature of report dated 26.02.2004. Still further, in his cross examination, the DW no where states even once that the Suit No.95/16 Page 15 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr report dated 26.02.2004 is not binding on the defendant.
22. Learned Counsel for defendant has also tried to argue that even the schedule of rates which forms the basis of report dated 26.02.2004 has not been produced in evidence in the present suit and hence the claimed amount cannot be allowed. This argument is also without any merit. In the present suit, this court has not been called upon to judge the merits of the claim of the plaintiff as raised before Sh. S. P. Kumar who gave the report. This court is seized of the issue pertaining to the binding status of that report and the cause of action springing from it. The merits of the claim as raised by plaintiff has already been decided by Sh. S. P. Kumar after going through the evidence available on record. The said report has not been challenged by the defendant. The defendant may keep sitting over it for a number of months or year without taking any action but that cannot dilute its binding nature which is derived from the main agreement dated 30.05.2000.
23. Once it stands established that the report dated 26.02.2004 is of binding character, the next question is that which remedy was available the plaintiff to effectuate its rights under the report?
24. The plaintiff first tried to execute the report dated 26.02.2004 as an arbitral award but the same was rejected by the court of Learned ADJ vide its judgment dated 27.04.2007. The only other remedy was to file a suit which the plaintiff did Suit No.95/16 Page 16 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr since Civil suit is the established mode of legal proceedings to enforce rights arising out of an agreement or a binding contract.
25. In view of the above discussion, issue No.5 & 6 are decided in favour of the plaintiff. In view of issue No.6 being decided in favour of the plaintiff, issue No.7 is also decided in favour of the plaintiff i.e. to claim interest on the suit amount.
ISSUE NO.2 2.1 Whether the suit is within limitation?
OPP.
2.2 Whether the suit is barred by time, (under article 7 of Schedule appended to the Limitation Ac)? OPD 1 & 2.
26. Both these issues have to be taken up together as these deal with question of limitation. Learned Counsel for the defendant argued that in terms of Article 7 of the Schedule of Limitation Act, the suit is time barred as it seeks to recover the charges claimed for personnel deployed by the plaintiff company pursuant to agreement dated 30.5.2000. The present suit was filed in April, 2010 whenever the limitation to institute suit for recovery of wages is three years. Ld. Counsel for the plaintiff, however, contends that this suit has been filed to enforce the Report dated 26.2.2004 pursuant to which arrears of difference in charges payable by defendant to plaintiff and what was Suit No.95/16 Page 17 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr actually paid, are being claimed. Accordingly, Article 7 of the Schedule of Limitation Act has no applicability. It is further contented by the Ld. Counsel for the plaintiff that the suit has been filed within three year of the dismissal of the execution petition by the Court of Ld. ADJ.
27. In the understanding of this Court, the applicable article of the schedule of Limitation Act is Article 55 and not 7 even though the limitation is three years in both the articles. However, the difference is relevant because the date of computing the limitation gets different in either case i.e Article 7 or Article 55. Article 55 deals with limitation in case of breach of contracts. In the understanding of the Court, a cause of action arose for the plaintiff when the defendant refused to abide by the report dated 26.2.2004 which had binding nature in view of the Agreement dated 30.5.2000. Thus, compliance of the report dated 26.02.2004 itself was a contractual obligation of the defendant. The plaintiff wrote three letters to the defendant asking it to comply with the report. The third such letter Ex.PW1/5, which is dated 8.7.2004 is a calculation chart on the basis of finding of report dated 26.2.2004 which can be said to be the starting of the limitation. Although, even prior to this, as per letter dated 22.03.2004, the plaintiff had asked the defendant No.2 to implement the report of Sh. S. P. Kumar but at that point of time, the plaintiff appears to have unconfirmed news about the submission of report by Sh. S. P. Kumar. A Suit No.95/16 Page 18 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr perusal of this letter, which has been exhibited as Ex.PW1/13, shows that the plaintiff had informal knowledge about the submission of report dated 26.02.2004. Defendant however denied ever having received Ex.PW1/5.
28. It then becomes important to see whether the execution petition filed by plaintiff would stop the running of limitation and if it did, when did the limitation actually expire. The date of instituting the execution petition is 30.10.2004. The date of Judgment in the said petition is 27.04.2007. The execution petition was dismissed on the ground that the report is unexecutable as an arbitral award. In other words, it was an incorrect or wrong forum. This would mean that Section 14 of the Limitation Act would come into play, which is reproduced hereinunder:
"14. Exclusion of time of proceeding bona fide in court without jurisdiction. (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceedings relates to the same matter in issue and in prosecuted in good faith in a court which, from defect of jurisdiction or other Suit No.95/16 Page 19 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr cause of a like nature, is unable to entertain it. (2) In computing, the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceedings is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in rule 2 of Order XXIII of the of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of subsection (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature."
29. The moot question is till when did the limitation period extend or which period has to be excluded for computation of limitation? The present suit was filed on 1.4.2010, little less Suit No.95/16 Page 20 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr than three years from the dismissal of execution petition on 27.4.2007 i.e. 26 days. However, limitation is not to be computed from 27.4.2007 but from the date when the breach can be said to have been caused by defendant of its contractual obligation to abide by report dated 26.2.2004.
30. For computing the period of limitation, the plaintiff submits that he received the report dated 26.02.2004 in July, 2014 pursuant to which a letter Ex. PW1/5 dated 08.07.2014 was sent by the plaintiff to the defendant claiming a sum of Rs.7,99,466.89P/ citing the report dated 26.02.2004 as the basis for the same. Assuming the best in favour of the plaintiff, the limitation is to be computed from the date when the plaintiff got knowledge of report dated 26.02.2004 i.e. 08.07.2004. The execution petition was filed by plaintiff on 30.10.2004. Same was dismissed on 27.04.2010. Hence, the period of limitation which started running on 08.07.2004, stopped on 29.10.2004 and recommenced on 28.04.2007.
31. Thus, the period spent in prosecuting the execution petition is to be excluded from computing the period of limitation. From the date of dismissal of the execution petition till the date of filing of the present suit, a period of 2 years 11 months and 4 days had elapsed. Add to this the period from 08.07.2004 till 29.10.2004 i.e. period of more than 3 months and it is clear that the present suit has been filed beyond the limitation period of 3 years.
Suit No.95/16 Page 21 of 25Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr
32. The Learned counsel for the plaintiff has also submitted that the present suit is within limitation in as much as the relevant Article to compute the limitation for present suit is Article 101 of the Schedule of the Limitation Act. Article 101 gives a period of 3 years to file a suit wherein the cause of action arises from a judgment of a court. Learned counsel submits that the cause of action arose for the plaintiff, to institute the present suit, when its execution petition to enforce the report dated 26.02.2004 was dismissed on 27.04.2007 wherein the Learned ADJ observed that the above said report is binding between the parties i.e. plaintiff and defendant.
33. Learned counsel thus submits that the present suit having been filed within 3 years from the judgment dated 27.04.2007, the issue of limitation should be decided in its favour.
34. I have carefully considered the submissions of the Learned counsel for the plaintiff but I tend to respectfully disagree with the same for the following reasons. Firstly, the cause of action for filing the present suit arose when Sh. S. P. Kumar gave his report dated 26.02.2004 and not when the execution petition filed by the plaintiff, to execute the report dated 26.02.2004 as an arbitral award, was dismissed. Infact, while submitting arguments on Issue No.5 & 6, the Learned counsel for the plaintiff, strenuously and repeatedly, stressed on the finding given by Sh. S. P. Kumar in his report to substantiate the plaintiff's claim for decree of Rs.7,99,466.89P/. This amount Suit No.95/16 Page 22 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr has been worked out on the basis of report dated 26.02.2004. Even in the para detailing the cause of action i.e. in the plaint, the plaintiff has mentioned the cause of action as being submission of report dated 26.02.2004 by Sh. S. P. Kumar. However, plaintiff has also relied on the judgment dated 27.04.2007 as being the cause of action to file the present suit.
35. It is patent that the plaintiff never had any doubts regarding the binding nature of report dated 26.02.2004 or else it would not have filed the execution petition on 30.10.2004. Therefore, it is not tenable now to change the entire line of argument regarding cause of action while addressing the issue of limitation.
36. Learned counsel for the plaintiff has cited a judgment of the Hon'ble High Court of Madras (AIR 1925 Madras HC) to reinforce its argument that the cause of action arose to file the present suit from the finding given by Learned ADJ in its judgment dated 27.04.2007. I have carefully perused the judgment in question and am of the opinion that the same has no application to facts of the present case. The ratio of said judgment is to the effect that a suit would be maintainable to enforce a judgment if the judgment itself is unexecutable. Learned counsel submits that the status of report dated 26.02.2004 is that of an unexecutable judgment as already held vide judgment dated 27.04.2007. Still further, the cited Suit No.95/16 Page 23 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr judgment also lays down that a suit is maintainable to enforce an obligation arising out of a judgment.
37. The court is unable to agree to the submission that report dated 26.02.2004 is an unexecutable judgment. Patently, it is not a judgment as referred to in the cited judgment. Nevertheless, the remedy available to enforce the said report is of course to file a suit. However, the judgment dated 27.04.2007 does not create a new obligation so as to permit the plaintiff to compute a fresh period of limitation. As has already been held while deciding issue No.5 & 6, report dated 26.02.2004 is a result of the contractual obligation undertaken by the plaintiff and the defendant, and compliance of the same or its binding nature also springs from the contract dated 30.05.2000 entered into between the parties.
38. In view of this, I am of the clear opinion that the present suit has been filed beyond the period of 3 years. Hence, issue No.2.1 is decided against the plaintiff and issue No.2.2 is decided against the defendants.
RELIEF
39. In view of my above discussion, the suit of the plaintiff is dismissed having been filed beyond the limitation period of 3 years. No orders as to cost. Decree sheet be prepared accordingly Suit No.95/16 Page 24 of 25 Vanguard Security & Fire Services (P) Ltd vs. M/s National Building Construction Company Ltd & Anr and thereafter, file be consigned to the record room after necessary compliance.
ANNOUNCED IN THE OPEN (DR. AJAY GULATI)
COURT ON 31.05.2016 ADDL. DISTRICT JUDGE06
SOUTH, SAKET COURTS,
NEW DELHI
Suit No.95/16 Page 25 of 25