Delhi High Court
Sai Engineers vs Imcc Ad+ on 1 September, 2005
Equivalent citations: I(2006)BC109
Author: O.P. Dwivedi
Bench: O.P. Dwivedi
JUDGMENT O.P. Dwivedi, J.
1. This order shall govern the disposal of IA No. 4759/ 2004 filed by defendant No. 1 seeking leave to defend the suit filed by the plaintiff.
2. The plaintiff has filed the suit for recovery of Rs. 20,90,527 against M/ s. International Metro Civil Contactors (IMCC), who are contractors under the Delhi Metro Rail Corporation (DMRC). Plaintiff themselves are sub-contractor under IMCC vide work order dated 15.12.2001. The aforesaid work order dated 15.12.2001 was amended w.e.f. 1.2.2002 by the IMCC vide their letter dated 5.2.2002. Plaintiff were to provide qualified skilled manpower to the IMCC on various terms and conditions contained in the said work order. According to the plaintiff they have been providing various qualified skilled manpower to the IMCC as per requirement and have been doing their work to the entire sati: faction of the defendant. Yet defendant No. 1 withheld payment in respect of three bills whose particulars are given in para 21 of the plaint which reads as under:
Bill Dated Amount in Rs.
1. 11.09.2002 9,64,891/-
2. 30.09.2002 7,82,295/-
3. 12.10.2002 3,43,341/-
Total 20,90,527/-
Since, the claims have arisen out of the written contract, the suit has been filed under Order 37, CPC. Defendant No. 1 has filed this application in the form of affidavit seeking leave to defend in the suit filed by the plaintiff.
3. The main defense set up by the defendant No. 1 in the affidavit is that the Contract was awarded to the plaintiff which was a proprietorship concern of Mr. Jaideep Thorat. But later on defendant No. 1 received a Memorandum of Understanding from the plaintiff which disclosed that there was some sort of arrangement between Mr. Jaideep Thorat and Mrs. Anjana Dhawa in which Mrs. Dhawa was required to pay Mr. Thorat Rs.40,000 per month only to Mr. Thorat and the entire work of the plaintiff was to be conducted and controlled by Mrs. Dhawa who is the wife of Mr. P.K. Dhawa, area Survey Manager of defendant No. 1. It is alleged that the plaintiff's company, which was under the control of Mrs. Anjana Dhawa had submitted inflated bills in respect of over time. These bills were got cleared in connivance with her husband Mr. P.K. Dhawa who was working as Survey Manager of defendant No. 1. It is the case of the defendant that in October 2002 Mr. P.K. Dhawa along with two other surveyors were asked to leave the defendant concern. Earlier the defendant had cancelled/withdrawn one survey team provided by the plaintiff and in retaliation the plaintiff cancelled the agreement and withdrew all his survey teams abruptly vide letter dated 7.10.2002 which amounts to breach of contract. According to the defendant huge payments have been made to the plaintiff in excess of their legal dues through the connivance of Mr. P.K. Dhava, Survey Manager of defendant No. 1 who is husband of Mrs. Anjana Dhawa, Manager and Controller of the plaintiff concern. Thus, according to the defendant nothing remains payable to the plaintiff. In reply, the plaintiff have not disputed the existence of relationship of husband and wife between P.K. Dhawa, Survey Manager of defendant No. 1 and the controller of plaintiff Mrs. Anjana Dhawa, but it is denied that inflated bills in respect of 'over time' were got cleared in connivance with Mr. P.K. Dhawa.
4. I have heard learned Counsel for the parties and perused the record particularly the work order and the correspondence exchanged between the parties. Para meters for grant/refusal of leave to defend were laid down by the Supreme Court in the case of Mechalec Engineers & Manufacturers v. Basic Equipment Corporation, . Referring to an earlier decision in the the case of Sm. Kiranmoyee Dassi V. Dr. J. Chatterjee, (1945) 49 Cal WN 246 at page 253, the Supreme Court in para 8 observed as under:
"(a) If the defendant satisfies the Court that he has a good defense to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.
(b) If the defendant raises a friable issue indicating that he has a fair or bona fide or reasonable defense although not a positively good defense the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he had a defense, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defense to the plaintiff's claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defense or the defense set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend.
(e) If the defendant has no defense or the defense is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defense to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defense."
5. In the present case the defendant has raised a friable issue. The plea that plaintiff has got passed inflated bills in respect of over time in connivance with P.K. Dhawa, Survey Manager of defendant No. 1, prima facie cannot be said to be without substance. Mr. Jaideep Thorat was the person controlling the plaintiff concern when the work was awarded to the plaintiff because of its good reputation but soon after award of contract, Mrs. Anjana Dhawa came into picture. She took over the management of the plaintiff concern on payment of a fixed sum of Rs. 40,000 to Mr. Jaideep Thorat. Obviously this must have been under a design. It would have been very easy to get all the bills cleared through her husband P.K. Dhawa who was working as Survey Manager of defendant No. 1. Area Survey Manager is a critical person for any survey team to deal with as he effectively takes responsibility for the performance of the survey team and certifies their work for the purpose of payment, including the time sheets of each Surveyor. Besides, the work of plaintiff was not found satisfactorily and on complaint of DMRC, defendant no. 1 had to cancel some of the survey team earlier. These pleas raised by the defendant involve questions of fact which if proved, will non-suit the plaintiff. In my view defendant's case was in category (b) referred to in para 8 of the Supreme Court judgment.
6. Accordingly, the application filed on behalf of defendant No. 1 for leave to defend is allowed. Unconditional leave to defend is granted to defendant No. 1.
IA stands disposed of.
CS (OS) No. 1749/20037. Written statement be filed within four weeks. Replication, if any, be filed four weeks thereafter. Documents be filed in the meantime.
8. List the matter before Joint Registrar for admission and denial of documents on 21st November 2005.
9. List the matter before Court on for framing of issues on 5th December 2005.
In the meantime parties may exchange proposed issues.