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Shri Satish Gupta vs Municipal Corporation Of Delhi ...

on 16 August, 2018

Delhi District Court


Shri Satish Gupta vs Municipal Corporation Of Delhi ... on 16 August, 2018
IN THE COURT OF SHRI GIRISH KATHPALIA,
DISTRICT & SESSIONS JUDGE
SOUTH EAST : SAKET COURT, NEW DELHI.

SUIT No. 31/2016 (207128/16)

SHRI SATISH GUPTA


S/O SHRI R.S. GUPTA
PROPRIETOR OF ESS KAY CONSTRUCTION CO.
OFFICE AT 8/7 PUNJABI BAGH EXTENSION
NEW DELHI 110026
....PLAINTIFF
VERSUS

MUNICIPAL CORPORATION OF DELHI (SOUTH)


THROUGH ITS EXECUTIVE ENGINEER−V
MUNICIPAL CORPORATION OF DELHI
MC PRIMARY SCHOOL BUILDING
SHIV MANDIR MARG, JAL VIHAR
LAJPAT NAGAR, NEW DELHI - 24.
...DEFENDANT

Date of filing this suit :


First date before this court : 1
Arguments concluded on : 03.08
Date of Decision : 16.

APPEARANCE : Shri Umesh Kashyap, counsel for plaintif


Shri Mahender Sharma, counsel for defendant

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.

2. Briefly stated, factual matrix as pleaded by plaintiff is as follows.

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2.1 For past long time, plaintiff is engaged in construction


work under the name and style M/s Ess Kay Construction Co. in the
department of the defendant, which is a government organization
established under the Delhi Municipal Corporation Act.

2.2 Defendant awarded construction work to plaintiff vide


order dated 03.04.2007, where under plaintiff was to construct five
classrooms, one computer room, one headmaster room, one store room, one library, one
s c i e n c e r o o m a n d t w o t o i l e t b l o c k s
(hereinafter collectively referred to as "the awarded work") at MCD
Primary School, NDSE−I, Central Zone, New Delhi. The awarded
work was to commence on 12.09.2007 and was to be completed by 11.09.2008.

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.

2.5 In the meanwhile, plaintiff issued letters dated


18.09.2007, 26.11.2007 and 20.02.2008 to the defendant, claiming his entitlement for damages
on the ground that the site of the awarded work had not been handed over since
12.09.2007. But defendant neither replied to the said letters of plaintiff nor handed
over the site nor gave any specific date for handing over the same. Plaintiff continued to rely on
t h e o r a l a s s u r a n c e s o f d e f e n d a n t ' s
officers and being bound by the terms of contract, he did not take any other work and kept his
tools, plant and labour ready.

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 3 of 24 pages


Defendant also wrote letter dated 10.01.2008 to DEO, Central Zone
for shifting of the school so that site of the awarded work could be handed over.

2.6 In reply to plaintiff's letter dated 20.02.2008, defendant


issued a false letter dated 18.03.2008 thereby alleging that the guard,
staff and machinery etc had not been arranged and made available at
the site of the awarded work. In response, on 25.03.2008, plaintiff
issued legal notice, thereby claiming money at the prevailing market

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Shri Satish Gupta vs Municipal Corporation Of Delhi ... on 16 August, 2018

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.

2.7 On 22.04.2008, at written request of plaintiff, the


Superintending Engineer adjourned the hearing to 09.05.2008. On
09.05.2008, plaintiff explained the reasons for delay and submitted letter dated 09.05.2008.

2.8 On 02.06.2008, plaintiff submitted a letter to the


defendant stating that on 09.05.2008 the Superintending Engineer
had decided that on account of shortage of site, instead of single
storey rooms, double storey room would be constructed on right side
of the school after demolishing 8 classroom sheds and new drawings
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 4 of 24 pages would be
prepared by the architect, which decision of the
Superintending Engineer was not being complied with.

2.9 On 22.07.2008, plaintiff submitted another letter to the


defendant, making mention of the above noted facts and admitting
that the drawings were handed over to the plaintiff on 10.07.2008
and that plaintiff had already started the work. It was also stated in
the said letter that Assistant Engineer of defendant had directed the
plaintiff telephonically to stop work as there was a political dispute about the site. On
07.08.2008, defendant issued false reply to plaintiff's letter dated 22.07.2008.

2.10 Vide letter dated 03.09.2008, defendant granted


provisional extension of time till 31.10.2008 and further extended the time upto 31.12.2008 and
finally upto 28.02.2009. Plaintiff submitted letters dated 28.01.2009 and 20.03.2009
requesting for compliance of its part by the defendant but defendant did not reply to those letters
and issued provisional extension of time upto 30.04.2009 vide letter dated 30.03.2009.
Thereafter, vide letter dated 29.05.2009, defendant granted further provisional extension of
time till 30.06.2009.

2.11 On 15.06.2009, the awarded work was completed in all respect


and case of plaintiff was recommended by the concerned Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 5 of 24 pages officers of defendant for approval of
extension of time to the competent authority.

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.

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2.13 During execution of work, defendant had paid upto 7th


running bill but did not release the final bill, security amount and other claims of plaintiff.
W h e n d e f e n d a n t i g n o r e d p l a i n t i f f ' s l e t t e r
dated 12.04.2010 for release of security amount, legal notice dated
25.01.2012 under Section 478 of the DMC Act was got issued to the
defendant by plaintiff, to which defendant issued a false reply dated 29.02.2012.

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.

2.15 The amount of Rs. 21,59,117/−, claimed by plaintiff is explained as follows:

(a) Rs. 95,389/− towards final bill amount;


(b) Rs. 25,000/− towards amount withheld on account
of extension of time;
(c) Rs. 70,389/− towards amount withheld on account
of third party charges;
(d) Rs. 80,106/− towards security amount;
(e) Rs. 4,47,346/− under clause 10CA of the
agreement;
(f) Rs. 1,40,265/− under clause 10C of the agreement;
(g) Rs. 4,26,062/− towards escalation in rates in other
material in extended period;
(h) Rs. 5,91,181/− towards damages for prolongation
of contract; and
(i) Rs. 3,78,768/− towards loss of profit.

3. In its written statement, the defendant admitted having

awarded the work contract as claimed by plaintiff, but denied the


pleadings of plaintiff and set up its version as follows.

3.1 The awarded work was assigned by defendant to


plaintiff vide work order dated 03.09.2007 for contractual amount of Rs. 78,82,441/− with
stipulated completion period of 12 months during the period from 12.09.2007 to 11.09.2008.

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

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Shri Satish Gupta vs Municipal Corporation Of Delhi ... on 16 August, 2018

delay of three months, plaintiff was solely responsible.

3.3 Plaintiff was made payments for work done by him


time to time in the form of Running Account bills (RA bills) and
lastly, 7th RA bill was released on 31.03.2010. The said 7 th RA bill
was referred to as Running Account bill but infact it was the final bill. After passing of 7th RA
bill on 30.10.2009, no work was executed by plaintiff. The said bill was referred to
as Running Account bill since pending approval of extension of time, amounts
were withheld by the defendant.

3.4 Defendant withheld the following amount :

(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;

(b) Rs. 80,106.20 forming 20% of the security


amount was withheld to recover levy of 2% of the tender
amount which had been recommended by the concerned department of the defendant; and

( 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.

3.5 The contract does not stipulate any payment towards


damages or loss of profit, so amount claimed by plaintiff under these
heads is beyond the scope of contract.

3.6 Labour, staff and machinery was not deployed by


plaintiff prior to handing over of the site, as the same was not even
possible because the site was a running school, so claim of plaintiff in that regard is false.

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.

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3.8 The actual date of completion of work by plaintiff was


not 15.06.2009 but 07.09.2009, which is so recorded in the 7 th RA
Bill duly signed by plaintiff. Plaintiff has falsely pleaded that when
he signed the 7th RA Bill, the date of completion was not entered.
The work carried out by plaintiff during the period from 17.08.2009 to 31.08.2009 has been
d u l y e n t e r e d i n m e a s u r e m e n t b o o k s f o r
which he was paid against 7th RA bill passed on 30.10.2009.

3.9 Plaintiff never issued letters dated 18.09.2007 or 26.11.2007 or 23.05.2008 or


0 9 . 0 5 . 2 0 0 8 . P l a i n t i f f ' s l e t t e r s d a t e d
20.02.2008, 10.04.2008 and 02.06.2008 are false. No meeting took
place between the parties on 09.05.2008.

3.10 On account of laxity on the part of plaintiff in getting


the design mix approved from an approved laboratory, show cause
notice dated 07.04.2008 was issued to him.

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.

5. On the basis of pleadings following issues were framed


by the Hon'ble Single Judge of the Delhi High Court :

(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.

16,04,854/−, without pleading the basis therefor


and merely by referring to mark 'A' and mark 'B' and mark 'C' annexed to the plaint and which also
do not contain any pleadings and which appear to have been prepared by the
plaintiff himself? OPP Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 11 of 24 pages

(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

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(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.

6. Vide order dated 05.03.2014, while framing the above


issues, the Hon'ble Single Judge of the Delhi High Court held that
issues no. (iv) and (v) would be treated as preliminary issues as no
evidence was required to be led on the same and if the same were
decided against plaintiff, claim of the plaintiff for balance amount
would fall below the minimum pecuniary jurisdiction of the Hon'ble
Delhi High Court. But before the said preliminary issues could be
adjudicated upon, the suit got transferred to the District Courts and
the same was retained for trial by my predecessor. After multiple
adjournments taken before my two predecessors, the suit under trial came before me. In
s u p p o r t o f t h e i r r e s p e c t i v e c a s e , b o t h s i d e s
examined one witness each. Having heard learned counsel for both
sides, my issuewise findings are as under :

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 12 of 24 pages


ISSUE No. 1

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.

8. Therefore, issue no. 1 is decided against plaintiff and it


is accordingly held not proved that after the 7th running bill plaintiff
raised any final bill of Rs. 95,389/− on defendant.

ISSUES No. 2 & 3

9. On behalf of plaintiff, it was argued that according to


evidence on record, the site was handed over to plaintiff only in the
month of June 2008 and plaintiff completed the awarded work in the month of June 2009, so
the defendant had wrongly withheld the Suit no. 31/2016 (207128/16)

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Satish Gupta vs MCD Page 13 of 24 pages


security amount on the pretext of a possibility of compensation to be
levied on the plaintiff. It was further argued that DW1 admitted that
time to conclude the awarded work had been extended without levy
of compensation. It was also argued that the defendant has neither intimated the approval of
extension of time after levy of compensation nor the alleged levy is as per clause 2 of
the agreement.

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.

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 14 of 24 pages

12. Perusal of record reflects that vide Ex. P10, officers of


the defendant till the level of Superintending Engineer proposed that
the work was finally completed by plaintiff on 15.06.2009 and the
delay was beyond the control of the plaintiff, so extension of time be
accorded without levy of any compensation. Apparently thereafter,
the concerned officials of the defendant slept over the matter for
more than 8 years and thereafter during pendency of this suit vide
time extension approval Ex. DW1/4, the Additional Commissioner
of the defendant held that out of total delay in completion of the
awarded work, a delay of two days was on the part of the plaintiff so extension of time upto
0 7 . 0 9 . 2 0 0 9 w a s a c c o r d e d w i t h l e v y o f
compensation at a rate of 2% on the plaintiff. In Ex. P10, officers of defendant till the level of
S u p e r i n t e n d i n g E n g i n e e r c l e a r l y
recorded that the awarded work was completed by the plaintiff on
15.06.2009 while in Ex. DW1/4, the said officers and their superiors
till Additional Commissioner recorded that the work was completed on 07.09.2009. But there
i s n o e x p l a n a t i o n a s r e g a r d s t h i s
discrepancy from defendant side. Rather, according to Ex. DW1/4,
even the file of this case was not available in official records of the

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Shri Satish Gupta vs Municipal Corporation Of Delhi ... on 16 August, 2018

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.

13. Further, as mentioned above, the document Ex. DW1/4


is dated 05.09.2017, which was during the pendency of this suit. The
said document, also being beyond pleadings, cannot be looked into
in order to fasten the plaintiff with liability to pay 2% compensation
which according to defendant comes to the tune of Rs. 1,14,404/−.
Plaintiff was not even granted any opportunity to challenge levy of
compensation by way of separate proceedings. As reflected in Ex.
DW1/4 itself, the compensation was levied despite the concerned filed not even being available.

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.

15. In view of above circumstances, issue no. 2 as to


whether the defendant is entitled to withhold Rs. 25,000/− pending
decision on the compensation to be levied on plaintiff does not even
survive since as mentioned above, defendant has already taken a decision by way of Ex. DW1/4.

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 16 of 24 pages

16. As regards issue no. 3 pertaining to withholding of the


security amount of Rs. 80,106.20, as mentioned above the security amount also was withheld
b y t h e d e f e n d a n t u n d e r t h e p r e t e x t o f
possibility of levy of compensation for delay and in view of above
discussion, plaintiff in this suit cannot be fastened with a liability to
pay any compensation, therefore, the security amount could not be withheld.

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.

ISSUES No. 4 & 5

18. A sum of Rs. 16,04,854/− has been claimed by plaintiff


on the basis of certain calculations, annexed with the plaint as Mark
A, Mark B and Mark C. A further sum of Rs. 3,78,768/− has been

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Shri Satish Gupta vs Municipal Corporation Of Delhi ... on 16 August, 2018

claimed by plaintiff towards loss of profit. But since there are no


pleadings as regards basis of the said calculations, issues no. 4 and 5
were framed as preliminary issues by the Hon'ble Single Judge of the Delhi High Court in order
to decide as to whether plaintiff is Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 17 of 24 pages entitled to the said amount
d e s p i t e t h e r e b e i n g n o p l e a d i n g s . A s
mentioned above, the Hon'ble Single Judge of the Delhi High Court vide order dated 05.03.2014,
while framing the issues held that issues no. 4 and 5 would be treated as
preliminary issues as no evidence was required to be led on the same. But before the said
preliminary issues could be adjudicated upon, the suit got transferred. Before my
learned predecessors also, no arguments were advanced on these preliminary issues and
rather trial commenced.

19. On this aspect, on behalf of plaintiff, it was argued that


he is entitled to claim the said amount on account of escalation of
rate of material and as damages for prolongation of work. It was
argued that clause 10 CA of the agreement is applicable if the rate of
items got increased after submission of the quotation and clause 10C
of the agreement is applicable on the basis of increase in price of materials and wages of labour.
In respect of this claim, plaintiff placed reliance on the judgments reported as 2006(2) RAJ 661 and
187 (2012) DLT 305 DB.

20. Per contra, on behalf of defendant, it was argued that


the said claim is beyond the terms of the contract and on account of
lack of pleadings, both these issues have to be decided against the plaintiff.

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 18 of 24 pages

21. The issue is not as to whether plaintiff has suffered any


loss or has spent any amount of money under the above mentioned
heads. The issue is whether plaintiff can be held entitled to the said
amount without pleading basis for the same. As mentioned above,
in the plaint, no basis has been pleaded by the plaintiff as regards the
said claims, annexed with the plaint as calculations marked as Mark A, Mark B and Mark C.
T h e r e a r e n o p l e a d i n g s t o a c t a s
foundation for the claim of plaintiff regarding the alleged escalation of rates etc.
The judgments relied upon by learned counsel for plaintiff deal mainly with the scope of
judicial intervention into arbitration award and different formulae; neither of those judgments
hold it to be legal position that despite the claimant having failed to
lay factual foundations, such claims can be awarded.

22. Plaintiff ought to have made specific pleadings as


regards the loss if any suffered by him which could be covered by
clause 10CA and/or clause 10C of the agreement and if so, the rates

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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.

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 19 of 24 pages

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.

24. Plaintiff admitted in his cross−examination that at the


time of handing over of the site, school was being run from there;
that simultaneous to the present work, he was engaged in few other
works also of MCD from different zones at different sites; that he
had visited the site prior to the tender stage and had come to know that a school was
b e i n g f r o m t h e r e . P l a i n t i f f l e d a b s o l u t e l y n o
evidence to show that he moved or even tried to move his machinery
or labour to the site in order to establish his claims for damages.
Rather, according to letter Ex. P4 dated 18.03.2008, till that day
plaintiff had not even procured the cement, steel, dry material and design mix from approved
l a b o r a t o r y i n s p i t e o f t e l e p h o n i c
communication from officials of the defendant. Official noting Ex.
P10 also reflects that it is the education department which refused to vacate the school till
06.06.2008 and immediately thereafter the awarded work commenced and demolition of
the vacated school started on 16.06.2008.

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.

26. Evidence on record as discussed above establishes that


delay in commencement of the awarded work was on account of
factors beyond control of both parties.

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.

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ISSUE No. 6

28. In view of above findings on issues no. 2 and 3,


plaintiff cannot be denied payment of the amount of Rs. 25,000/−,
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 21 of 24 pages
which had been withheld out of 7th RA bill and the amount of Rs. 80,106.20 which had been
withheld being 20% of the security amount.

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.

30. As reflected from record, on the basis of defendant's


pleadings of admission, vide order dated 15.09.2017, defendant was directed to pay atleast the
admitted amount to plaintiff. Accordingly, on 17.04.2018, a sum of Rs. 1,65,746/− was paid by
defendant to plaintiff in court towards admitted liability. That amount is liable to be
deducted out of the above mentioned outstanding amount.

31. So far as the interest payable on the outstanding


amount, it was argued on behalf of the plaintiff that interest at a rate
of 18% per annum would be fair and appropriate with effect from
Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 22 of 24 pages
30.10.2009 in view of law laid down in the judgment reported as JT
(2006) 7 SC 464. Per contra, on behalf of defendant, it was argued that no interest is payable at all.

32. The judgment relied upon by plaintiff side deals mainly


with the issue of grant of interest in the arbitral proceedings and lays down that award of interest
a n d r a t e t h e r e o f i s t h e d i s c r e t i o n o f
court and unless the same was exercised arbitrarily, the appellate,
revisional or writ court would not interfere.

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.

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Shri Satish Gupta vs Municipal Corporation Of Delhi ... on 16 August, 2018

34. Keeping in mind the nature of transaction between the


parties and overall circumstances as described above, interest on the outstanding amount at a
rate of 8% per annum with effect from Suit no. 31/2016 (207128/16)
Satish Gupta vs MCD Page 23 of 24 pages 30.10.2009 when 7th RA bill was
passed till the date of actual payment shall be fair and reasonable amount of interest.

35. Accordingly, issue no. 6 is decided in favour of


plaintiff and he is held entitled to recover from the defendant a sum
of Rs. 97,360.20 paise with simple interest thereon at a rate of 8% per annum with effect from
30.10.2009 till the date of actual payment.

ISSUE No. 7 (RELIEF)

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.

37. Decree sheet be accordingly drawn. File be consigned to records.

Announced in the open court on


this 16th day of August, 2018 (GIRISH KATHPALIA)
District & Sessions Judge
Digitally signed

by GIRISH South East, Saket Courts


GIRISH
New Delhi 16.08.2018 (a)
KATHPALIA
KATHPALIA Date: 2018.08.18
15:02:52 +0530

Suit no. 31/2016 (207128/16) Satish Gupta vs MCD Page 24 of

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