M/S Jagbir Singh Sharma vs Mcd & Ors
2008 Latest Caselaw 2040 Del

11

	IN  THE  HIGH  COURT  OF  DELHI  AT  NEW  DELHI



 				CS(OS) 943/2008

	

						Date of decision : 20.11.2008





	M/S JAGBIR SINGH SHARMA                          ..... Plaintiff

				Through Mr.Sandeep Sharma, Adv.



			versus



M.C.D. & ORS  			..... Defendants

				Through Ms.Suparana Srivastava, Adv.



	CORAM 

*	HON'BLE MS.JUSTICE HIMA KOHLI

	Whether Reporters of Local papers may  

be allowed to see the Judgment? No

    2. To be referred to the Reporter or not? No 

    3. Whether the judgment should be 

        reported in the Digest? No



HIMA KOHLI,  J.  ( O R A L )



IA No.14036/2008 (by defendant for leave to defend) & CS (OS) No.943/2008 & IA Nos.7609/2008 (u/O 37 R 1 CPC), 9764/2008 (u/O 37 R 3 (4) CPC) & 11510/2008 (u/O 37 R 3 (7) CPC







1.

The plaintiff has filed a summary suit under the provisions of Order 37 CPC against the defendant MCD, for recovery of Rs.32,20,715/-, out of which, the principal amount claimed by the plaintiff against the defendant MCD is Rs.27,20,957/-.

The plaintiff herein is a contractor and has been executing the works of the defendant MCD. The subject matter of the present suit is the amount payable to the plaintiff for the work carried out by it in terms of the work order dated 3.5.2006 under the name and style, "Improvement and strengthening of SSN Marg from Mehrauli Gurgaon road to Chandhanhoula Village Phase I in South Zone, SH. Improvement of Central Verge from 60' ROW road intersection Chattarpur to Chandanhoula Village". The plaintiff commenced the work and completed the same on 10.11.2006. After completion of work, the first and final bill of Rs.27,60,068/- was prepared, from which security amount of Rs.2,00,986/- was deducted. A bill of Rs.24,46,472/- was passed by the MCD on 28.7.2007.

Counsel for the plaintiff states that as the defendant MCD failed to clear the bills passed by it, by paying the entire amounts due and payable to the plaintiff, the plaintiff was compelled to institute the present suit claiming recovery of the principal amount as also for refund of security deposit paid to the defendant, along with interest thereon claimed @ 18% p.a.

4. In the leave to defend application, the defendant MCD does not dispute the factual position as stated above. It also does not dispute that a bill of Rs.27,60,068/- was passed by the defendant MCD and the said amount is due and payable to the plaintiff. However, reliance is placed by the counsel for the defendant MCD on the amendments made in Clauses 7, 9, 9A of the General Conditions of Contract for MCD works issued vide circular dated 19.5.2006. For ready reference, the aforesaid circular is reproduced herein below:-

"The payment of bills will depend on availability of funds in particular head of account from time to time in MCD. Payments of bills shall be made strictly on Queue basis i.e. first the past liabilities will be cleared and after that the release of payment for passed bills will be in order of the demand received at HQ under particular head of account."

5. It is stated on behalf of the defendant MCD that the amounts could not be released to the plaintiff due to non-availability of funds from the GNCT Delhi for which correspondence has been entered with the latter and MCD has been assured that funds will be released shortly. It is canvassed on behalf of the defendant that the present suit instituted by the plaintiff is premature and that the plaintiff ought to await his turn for payment along with other similarly placed contractors, as payment of the past bills is dependant on the availability of funds with the MCD. It is further stated that a circular for `priority turn' dated 4.8.2006, was recalled and hence payment shall be strictly on a `Queue basis'. Counsel for the defendant MCD further states that the plaintiff is not entitled to any interest either on the principal amount or the security deposit in view of the amendment dated 19.5.2006.

6. In rejoinder, counsel for the plaintiff draws the attention of this Court to the order dated 13.7.2008, passed in three summary suits, one of which was instituted by the plaintiff herein against the defendant MCD. The aforesaid suits, i.e. CS(OS) No.1797/07, 1805/07 & 1806/07 have been decreed by a common order by rejecting the applications for leave to defend filed by the defendant MCD therein.

7. The only difference in the stand taken by the MCD here, as compared to the leave to defend applications filed by it in the aforesaid suits is that the defendant MCD has only raised an objection in the present case, to the suit being premature and claimed that payment is to be made in due course, as and when funds shall be made available. However, in the aforesaid decreed suits, the defendant MCD had taken two additional pleas in its leave to defend applications, with regard to Clause 25 of the General Terms which provided for arbitration and absence of statutory notice to the MCD before institution of the summary suits.

8. The defence taken in leave to defend application of the defendant MCD insofar as the amended Clause 9A of the General Conditions of Contract dated 19.5.2006, is concerned, is turned down for the reason that admittedly, the contract entered into between the parties was prior in time i.e. on 13.10.2005, which was followed by the work order dated 3.5.2006. For any contract to fructify, there ought to be mutuality between the parties, which is missing in the present case as the plaintiff is neither a signatory to the purported amended terms and conditions of the original contract and nor has it consented to the amendment. The said amendment has been foisted by the defendant suo motto on the plaintiff. There is no justification offered in the application for leave to defend for refusing to pay the amounts due and payable to the plaintiff, except for the stand that funds have not been made available to the MCD. This can hardly be the concern of the plaintiff, as the availability of the funds is a matter purely between the MCD and GNCT Delhi. The defendant MCD is expected to have released the amounts due and payable to the plaintiff, within a reasonable time. However, even after lapse of a period of one year and eight months, the defendant MCD, has not taken any steps to release even part of the amount due and payable to the plaintiff.

9. The plaintiff cannot be expected to wait unendingly with folded hands, awaiting payment from the defendant MCD as and when GNCT Delhi chooses to release funds to MCD. The provisions of Section 46 of the Indian Contract Act, 1872 are relevant in this regard. While the said provision does not stipulate the time limit for payment, it clarifies that the engagement must be performed within a `reasonable time'. By no stretch of imagination can one year eight months be termed a "reasonable time". To top it all, despite order dated 19.9.2008, the defendant has not paid the admitted amount to the plaintiff.

10. This leaves the issue of payment of interest. The plaintiff has claimed interest @ 18% p.a. on the principal amount of Rs.24,46,472/- for the period w.e.f. 28.3.2007 (30 days from the date of the bill becoming due and payable) till the date of institution of the suit. Similarly, interest @ 18% has been claimed on the security amount of Rs.2,74,485/- from 10.11.2007, i.e. period of one year from the date of completion of contract till the date of institution of the suit. Counsel for the plaintiff relies on the judgment rendered by the Supreme Court in the case of Secretary, Irrigation Department, Government of Orissa and Others Vs. G.C. Roy reported as AIR 1992 SC 732, wherein it is held that a person is entitled to the payment of interest on the principal amount and the security deposit illegally retained, on the ground that the person deprived of the use of money to which he is legitimately entitled, has a right to be compensated for the deprivation, call it by any name. He states that the plaintiff shall not press for interest @ 18% p.a. and leaves it to the Court to impose interest at such rate on the defendant MCD, as may be considered reasonable.

11. Accordingly, the application of the defendant MCD for leave to defend is dismissed. It is ordered that the plaintiff is entitled to receive a sum of Rs.24,46,472/- towards the principal amount and Rs.2,74,485/- towards refund of security deposit. It shall also be entitled to payment of simple interest @ 10% p.a. on Rs.24,46,472/- w.e.f. 28.3.2007, till realization and simple interest @ 10% p.a. on the security amount of Rs.2,74,485/- w.e.f. 10.11.2007, (i.e., after expiry of 12 months from the date of execution of the contract), till realization along with costs. The suit is decreed on the aforesaid terms.

12. The suit and pending applications are disposed of.

13. The file be consigned to the Record Room.

HIMA KOHLI,J

NOVEMBER 20, 2008

`ns'