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on 16 August, 2018
J U D G M E N T
1.
Plaintiff, engaged in business of construction work, has brought this composite suit, seeking
decree of declaration and a decree of money recovery with interest and cost.
Defendant contested the suit by filing detailed written statement which
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 1 of 24 pages followed a
replication from plaintiff and on the basis of issues
framed, trial was conducted. Originally, this suit was filed on the
Original Side of the Hon'ble Delhi High Court but after framing of
issues, the suit was transferred to the District Court on account of
enhancement of pecuniary jurisdiction, so trial was conducted in this
court. I have heard learned counsel for both sides, who also opted to file written submissions.
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 2 of 24 pages 2.3
Immediately upon receipt of work order, plaintiff made
all arrangements to execute the awarded work. But the site where the awarded work had to be
p e r f o r m e d w a s n o t h a n d e d o v e r t o
plaintiff by the defendant till 06.06.2008 since the site was school
premises, which were not vacated by the education department in time.
2.4 It is only on 07.06.2008 that the site of the awarded work was handed over to plaintiff.
Plaintiff started the awarded work on 16.06.2008 and completed the same on 15.06.2009.
Plaintiff had accepted the measurement recorded by Shri Sunil Jain
but the date of completion and recording of measurements was not
entered when plaintiff signed the 7th Running Bill.
rate and also requesting for handing over of the site of the awarded work.
Defendant, on 17.04.2008 replied to plaintiff's notice and
directed the plaintiff to attend the office of Superintending Engineer (Pr) VII on 22.04.2008.
2.12 But instead of approving the extension of time, defendant issued another letter for
approval of extension of time with same facts except the actual date of completion, which was
changed from 15.06.2009 to 07.09.2009 and for levy of compensation at a rate of 2%
of the tendered amount in contravention of clause 2 with ulterior motive in order to escape the
liability to pay damages. A sum of Rs. 1,14,404/− which is 2% of
the tendered amount was sought to be deducted/withheld from final bill by the defendant's officers.
2.14 Hence, the present suit, seeking declaration against recommendation of imposition
of 2% compensation on tender amount and recovery of Rs. 21,59,117/− with interest at a rate of
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 6 of 24 pages
18% per annum with effect from 30.10.2009 till the date of actual payment.
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 7 of 24 pages 3.2
Site of the awarded work being a running school, as per contract the same could not be
handed over to plaintiff for construction immediately. The site was handed over to plaintiff
only on 06.06.2008 when the same was handed over to the
defendant by the educational department. As per record, actual date of commencement of work
was 16.06.2008 and actual date of completion of work was 07.09.2009. Plaintiff
delayed the completion of the awarded work by about 3 months, taking the
commencement date as the date of handing over of site and for this
(a) Rs. 25,000/− was withheld from 7th RA bill so that in case any compensation was levied
on the plaintiff Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 8 of 24 pages
under clause 2 of the contract at the time of considering
approval of time extension, the same could be recovered from that withheld amount;
( c ) R s . 7 0 , 3 8 9 / − w a s d e d u c t e d a s b a l a n c e a m o u n t o f
the actual costs incurred towards Quality Control Tests
carried out by independent organizations and this amount was part of enhanced contractual
amount after adding 1.75% of the tender amount for those expenses.
3.7 Plaintiff's claim for escalation of rates in the extended period is beyond the scope of
contract. According to the Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 9 of 24 pages calculations done by the concerned
department of defendant, amount of Rs. 4,47,346/− claimed by plaintiff under clause 10CA is
inflated amount and the actual amount under this head is Rs. 1,58,000/−, which shall
b e p a i d e x p e d i t i o u s l y . S i m i l a r l y , t h e
amount of Rs. 1,40,265/− claimed by plaintiff under clause 10C is
wrong and defendant is not liable to pay any amount under that head to the plaintiff.
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 10 of 24 pages 3.11
Therefore, the suit is liable to be dismissed.
4. Plaintiff filed replication, denying the pleadings of the defendant and reiterated plaint contents.
(i) Whether the plaintiff, after the 7th running bill, raised a final bill of Rs. 95,389/− on
the defendant and if so, whether the plaintiff is entitled to the amount thereof? OPP
(ii) Whether the defendant is entitled to indefinitely withhold Rs. 25,000/− pending the
decision on the compensation to be levied on the plaintiff under Clause 2 of the contract? OPD
(iii) Whether the defendant is justified in withholding the security amount of Rs. 80,106.20
paise ?OPD
(iv) Whether the plaintiff is entitled to any damages or damages in the sum of Rs.
(v) Whether the plaintiff is entitled to an amount of Rs. 3,78,768/− towards loss of profit in
addition to damages claimed of Rs. 16,04,854/− again without any pleadings? OPP
(vi) If the plaintiff is found entitled to any monies, whether the plaintiff is entitled to
any interest thereon and if so, at what rate and for what period? OPP
(vii) Relief.
7. According to plaintiff, after 7th RA bill, final bill of Rs. 95,389/− was raised on defendant
a n d t h e s a m e r e m a i n s u n p a i d .
According to defendant, 7th RA bill itself was the final bill as after passing of 7th RA bill on
3 0 . 1 0 . 2 0 0 9 , n o w o r k w a s e x e c u t e d b y
plaintiff. As mentioned above, according to plaintiff, the awarded
work was completed on 15.06.2009 and according to defendant, the
awarded work was completed on 07.09.2009, so according to both
sides, no work was carried out by plaintiff after 30.10.2009 when 7 th RA bill was passed.
Plaintiff himself stated in his cross− examination that he did not prepare the final bill.
That being so, plaintiff cannot be held entitled to claim a sum of Rs. 95,389/− under
the head of final bill.
10. On behalf of defendant, it was argued that even during the period from June 2009 to
S e p t e m b e r 2 0 0 9 , t h e w o r k w a s i n
progress as reflected from copy of cement register Ex. DW1/1. It was
also argued that plaintiff has wrongly claimed Rs. 95,389/− towards final bill as last 7th RA bill
passed on 30.10.2009 was released on 30.03.2010 and no further work was executed by
plaintiff after 30.10.2009. It was argued that in view of approval Ex. DW1/4,
plaintiff is liable to pay to defendant a sum of Rs. 1,14,404/− towards
2% compensation levied on account of delay.
11. As mentioned above, according to defendant, a sum of Rs. 25,000/− from 7th
R A b i l l a n d a s u m o f R s . 8 0 , 1 0 6 . 2 0 t o w a r d s
security amount were withheld by the defendant so that in case any
compensation was levied on the plaintiff at the time of considering approval of time extension,
the same could be recovered from withheld amount.
defendant and the extension of time was processed in the light of the
present suit. Therefore, it is Ex. P10 which appears to be a genuine
document, after preparation whereof, records of the defendant got
misplaced in their office and they created Ex. DW1/4 on the basis of
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 15 of 24 pages the
present suit. In other words, it has to be held that even
according to the defendant, the awarded work was finally completed
on 15.06.2009 and the delay in completion thereof was beyond the control of the plaintiff.
14. Therefore, in the name of levy of 2% compensation on the ground of alleged delay in
completion of the awarded work, defendant cannot escape its liability.
17. That being so, plaintiff cannot be denied payment of Rs. 25,000/− wrongly withheld from
7th RA bill and release of security amount of Rs. 80,106.20 which forms the withheld 20% of
the security. Consequently, issues no. 2 and 3 are decided against the defendant.
of raw material and labour wages etc on the date of the scheduled
commencement of the awarded work in comparison with the date of actual commencement of
the awarded work. In the absence of specific pleadings, even the formulae discussed in the
judgments relied upon by plaintiff cannot be applied to the present case.
23. Further, I have also examined the record in order to ascertain as to which of the parties was
responsible for delay in completion of the awarded work.
25. At the same time, the defendant also does not appear to have simply slept over the issue.
Correspondence Ex. P3 dated Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 20 of 24 pages 10.01.2008 addressed to the education
department reflects that defendant had repeatedly requested the said department to vacate the
school premises so that the site could be handed over to the contractor.
27. Therefore, on account of absence of specific pleadings coupled with the evidence on record
reflecting that the delay in commencement of the awarded work was on account of
factors beyond control of both parties, plaintiff's calculations of damages to the tune of Rs.
1 6 , 0 4 , 8 5 4 / − u n d e r c l a u s e 1 0 C A , c l a u s e 1 0 C ,
escalation of rates and damages for prolongation cannot be allowed.
Consequently, issue no. 4 is decided against plaintiff. Similarly, on
account of absence of specific pleadings, plaintiff is also not entitled to claim a sum of Rs.
3,78,768/− towards loss of profit. Consequently issue no. 5 also is decided against plaintiff.
ISSUE No. 6
29. As mentioned above, issue no. 4 has been decided against plaintiff holding that on
account of lack of pleadings, plaintiff's claim for Rs. 16,04,854/− cannot be upheld. But at the
same time, as regards damages pertaining to clause 10CA of the agreement, defendant has
pleaded that according to their calculations, they are liable to pay to plaintiff a sum
of Rs. 1,58,000/− under clause 10CA of the agreement. That admitted
amount of Rs. 1,58,000/− also cannot be denied to the plaintiff.
33. Interest is basically the compensation allowed by law or fixed by parties for use or
f o r b e a r a n c e o r r e t e n t i o n o f m o n e y
wrongfully by the person liable to pay. Interest is a compensation paid by the borrower to the
lender for deprivation of use of his money. Proviso to section 34 CPC contemplates
that where financial liability arose out of a commercial transaction, the trial
court can award pendentelite and future interest more than 6% per
annum but the same shall not exceed the contractual rate of interest
or the rate at which money is lent by nationalized banks in relation to commercial transaction.
36. In view of above findings, suit of plaintiff succeeds and is decreed with cost for a sum of
Rs. 97,360.20 paise (Rupees Ninety Seven Thousand Three Hundred Sixty and Paise
Twenty only) with interest thereon at a rate of 8% per annum with effect
from 30.10.2009 till the date of actual payment.