Mahendra Realtors And ... vs The National Co-Operative ...
2021 Latest Caselaw 2016 Bom

                                                       1-ial-9115-2020.doc




          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
              ORDINARY ORIGINAL CIVIL JURISDICTION

               INTERIM APPLICATION (L) NO.9115 OF 2020
                                 IN
             COMMERCIAL SUMMARY SUIT NO.1219 OF 2019
                            ALONG WITH
              INTERIM APPLICATION (L) NO.9126 OF 2020
                                 IN
             COMMERCIAL SUMMARY SUIT NO.1237 OF 2019

Mahendra Realtors & Infrastructure
Private Limited                                ...Plaintiff
           vs.
The National Co-Operative Construction
and Development Federation of India            ...Defendant

                           ALONG WITH
              INTERIM APPLICATION (L) NO.9109 OF 2020
                                IN
             COMMERCIAL SUMMARY SUIT NO.1230 OF 2019

M/s.M.S. Shah and Associates                   ...Plaintiff
          vs.
The National Co-Operative Construction
and Development Federation of India            ...Defendants

Mr. Ramesh Ramamurthy a/w. Mr. Saikumar Ramamurthy and
Ms. Jayashree Pillai, for the Applicants/Plaintiffs.
None for the Defendants.

                        CORAM : N. J. JAMADAR, J.
                        DATE :  FEBRUARY 01, 2021

JUDGMENT

1. These Commercial Division Summary Suits have been

instituted for recovery of the amount of RA Bills and security

deposit under the terms of contract. These suits have their

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genesis in a contract executed between the parties on 4 th March,

2017. Hence, all these Suits are being disposed of by a common

judgment.

2. The material averments in the Suit No. 1237 of 2019 (which

is taken as a lead case) can be stated in brief as under:

(a) The plaintiff is a private limited company. It deals in the

business of construction. The defendant is a company registered

under Ministry of Agricultural, Govt. of India, Department of

Agriculture & Cooperation, New Delhi. Defendant deals in the

business of construction and development work on depository

work basis. The defendant had invited a tender on 7 th January,

2017 for the work of structural repair and allied civil work for SDF

Building No.1 to 6 and Gems and Jewellery building nos.1 to 3 in

the premises of SEEPZ SEZ (Special Economic Zone) Authority,

Mumbai. The estimated cost of the said work was

Rs.35,68,32,015/-. The bid submitted by the plaintiff was

accepted. The defendant issued a Letter of Intent on 17 th February,

2017. In terms of the Letter of Intent, the plaintiff accepted the

offer by submitting a letter of acceptance dated 18 th February,

2017. A work order came to be issued on 4 th March, 2017.

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(b)     The scope of work was to carry out structural repairs and

allied civil works of SDF building nos.5 and 6 at SEEPZ SEZ

premises for the estimated cost of Rs.13,70,23,065.67. The work

was to be carried out within the stipulated period, of eight

months, under the supervision and guidance of M/s. Conspro

Management Services, the Project Manager. A formal contract for

the said work came to be executed on 4th March, 2017.

(c) The plaintiff completed the work in terms of the contract by

31st October, 2017. The Project Manager certifed the completion of

work in accordance with the terms of the contract. RA Bills were

raised by the plaintiff. Out of them, the defendant paid the

amount covered by and upto 5th RA Bill. The 6th RA Bill was

raised vide letter dated 8th December, 2017. After adjusting the

payment received, including an advance, a sum of

Rs.3,22,76,410/- was due and payable under the 6th RA Bill.

(d) The defendant did not disburse the payment under the 6 th

RA Bill within the specifed period, as per the terms of the

contract. The plaintiff called upon the defendant to release the

payment by letter dated 12th January, 2018. Many reminders

followed. Even communication to the concerned offcers of SEEPZ

SEZ did not yield any result. Ultimately, the defendant on 24 th

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August, 2018 informed the plaintiff that the balance payment

shall be made after receipt of payment from the SEEPZ SEZ

Authority and after obtaining approval from the Ministry. Vide

communication dated 14th September, 2018, it was informed that

the payment was withheld by SEEPZ SEZ Authority and

outstanding balance would be cleared no sooner the payment is

released by the SEEPZ SEZ Authority.

(e) The plaintiff thus addressed a legal notice to the defendant

and the Development Commissioner SEEPZ SEZ and called upon

the defendant to pay the outstanding amount along with interest

at the rate of 18% p.a. The defendant paid no heed. Hence, these

Suits.

3. Commercial Summary Suit No.1230 of 2019 is instituted for

recovery of a sum of Rs.3,29,68,393/- along with interest at the

rate of 18% p.a. It is in respect of 7 th and Final Bill dated 11th

October, 2018.

4. Commercial Summary Suit No.1219 of 2019 is instituted for

recovery of a sum of Rs.1,05,45,654/- along with interest at the

rate of 18% p.a. It is in respect of 11 th and Final Bill dated 12 th

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October, 2018. Additionally, in all the suits there is a claim for

refund of security deposit.

5. Upon the service of writ of summons, the defendant entered

appearance. Whereupon the plaintiff took out the summonses for

judgment in all three Suits. By fling affdavits-in-reply, the

defendant had sought an unconditional leave to defend the suit.

6. By an order dated 25th February, 2020 this Court was

persuaded to grant leave to the defendant to defend the suit on

the condition of deposit of the amount of Rs. 3,42,28,633/- (in

Suit No. 1237 of 2019), Rs. 2,54,04,776/- (in Suit No. 1230 of

2019) and Rs.81,30,553/- (in Suit No.1219 of 2019) within a period

of eight weeks thereof. It was further provided that if the said

conditional order was not complied with within the stipulated

period, the plaintiff would be entitled to apply for ex parte decree

against the defendants after obtaining a non-deposit certifcate

from the Prothonotary and Senior Master of this Court.

7. The defendant has not complied with the condition of

deposit. The plaintiff has obtained non-deposit certifcate dated 9 th

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December, 2020 from the Prothonotary and Senior Master, in each

of the Suits.

8. In view of the provisions contained in Order Order XXXVII

Rule 3(6) of the Code of Civil Procedure, 1908, on failure of the

defendant to give security within the time specifed by the Court

or to carry out such other directions as may have been given by

the Court, the plaintiff becomes entitled to judgment forthwith.

9. Nonetheless this Court has considered the justifability of he

claim and its tenability under the provisions of Order XXXVII of

the Code. The plaintiff has fled affdavit in support of the claim in

each of the suits. The plaintiff has also tendered the original

documents for the perusal of the Court. The affdavits and original

documents are taken on record.

10. The documents reveal that the notice inviting tender was

issued on 21st January, 2017. The letter of intent dated 17 th

February, 2017 indicates that the bid submitted by the plaintiff

was accepted and the defendant awarded the contract of carrying

structural repairs and allied civil works of SDF 5,6 & GJ 1

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building at SEEPZ-SEZ premises at an estimated cost of Rs.

13,70,23,065.67/-. The work order came to be issued on 4 th

March, 2017. An agreement came to be executed on 4 th March,

2017. The Plaintiff executed the work in terms of the contract. The

project management consultant certifed the satisfactory

completion of the work. Indisputably, the payments were made

upto 5th RA Bill. The dispute arose as the payment of 6 th RA Bill

and the succeeding Bills remained outstanding. The agreement

and the RA Bills constitute a written contract within the meaning

of Clause (b) of Rule 1(2) of Order XXXVII of the Code.

11. The demand of the amounts covered RA and Final Bills and

the fact that no dispute about the quality and quantum of work

was ever raised by the defendant, becomes evident from the

perusal of the documents placed on record. The claim of the

defendant that the payment was to be received from SEEPZ

authority and the matter awaited approval of the Ministry does

not absolve the defendant of its contractual liability to pay the

outstanding amount.

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12. In this view of the matter, the claim of the Plaintiff to the

extent of outstanding amount of RA and Final Bills and security

deposit is wholly justifable. The question that wrenches to the

fore is of the interest which the outstanding amount shall carry.

In the contract, there is no stipulation for payment of interest over

the amount which remains outstanding. In the backdrop of the

nature of contract between the parties, the juridical character of

the defendant and the overall situation in the money market, it

may be appropriate to award interest @ 10% p.a. from the date of

Suit till realization. The suits thus deserve to be decreed. Hence

the following order.

ORDER

In Commercial Summary Suit No.1237 OF 2019:-

1]      The suit stands partly decreed.

2]      The defendant do pay a sum of Rs.3,42,28,633/- (Rupees

Three Crore Fourty Two Lacs Twenty Eight Thousand Six Hundred

and Thirty Three) along with further interest @ 10% p.a. from the

date of the suit till realization.

In Commercial Summary Suit No.1230 OF 2019:-

1]      The suit stands partly decreed.


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2]      The defendant do pay a sum of Rs.2,54,04,776/- (Rupees

Two Crore Fifty Four Lacs Four Thousand Seven Hundred and

Seventy Six) along with further interest @ 10% p.a. from the date

of the suit till realization.

In Commercial Summary Suit No.1219 OF 2019:-

1]      The suit stands partly decreed.

2]      The defendant do pay a sum of Rs.81,30,553/- (Rupees

Eighty One Lacs Thirty Thousand Five Hundred and Fifty Three)

along with further interest @ 10% p.a. from the date of the suit till

realization.

3] The defendants shall pay the costs of Rs.1,00,000/- (One

Lakh), to the Plaintiff, quantifed under Section 35 of the Code of

Civil Procedure, 1908, as amended by the Commercial Courts Act,

in each of the suits.

4] The refund of Court-fees, if any, be made as per rules in

each of the suits.

5] The decree be drawn up and sealed expeditiously.

6] Interim Applications, in each of the suits, stand disposed of.

                                          [N. J. JAMADAR, J.]

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