M/S Evam Construction Pvt Ltd vs The Director (Joie De Vivre
2014 Latest Caselaw 5703 Del

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*        IN THE HIGH COURT OF DELHI AT NEW DELHI
+        CS(OS) 1473/2012
%                                         Date of decision :12th November, 2014
         M/S EVAM CONSTRUCTION PVT LTD               ..... Plaintiff
                      Through : Mr.Amit Sharma, Adv.

                            versus

         THE DIRECTOR (JOIE DE VIVRE
         RESTAURANTS ) & ANR                            ..... Defendants
                       Through : Mr.Deo Prakash Sharma, Mr.Prabhaker
                                 Mehar, Mr.Manoj Yadav and Mr.Umesh
                                 Gupta, Advs.

         CORAM:
            HON'BLE MR. JUSTICE G.S.SISTANI

G.S.SISTANI, J. (Oral)

I.A.17539/2012

1. This is an application filed by defendant under Order XXXVII Rule 3 of the Code of Civil Procedure seeking leave to defend.

2. Plaintiff has filed the present suit under the provisions of Order XXXVII of the Code of Civil Procedure for recovery of Rs.30,05,627.03 together with interest at the rate of 24%, per annum, w.e.f. 16.4.2010 till the date of actual payment/realisation of the same.

3. The facts, which have given rise to the filing of the present suit, is a work order relating to civil, interiors, electricals and plumbing works for kitchen area in the restaurant of defendant no.1 which was placed by the defendants upon the plaintiff. As per the plaint, the work order was issued on 22.9.2008 in favour of the plaintiff for the construction of

abovementioned facility at Hotel Samrat, Kautilya Marg, Chanakyapuri, New Delhi. As per the plaint, the contract for kitchen works was an "Item Rate Contract".

4. Learned counsel for the plaintiff submits that the present suit is based on the aforesaid work order, the bill approved by the Project Manager and the certificate issued by the Project Manager, which shows that the work has been completed.

5. Learned counsel for the defendants submits that the present suit is not maintainable under the provisions of Order XXXVII of the Code of Civil Procedure, although counsel does not dispute the execution of the work order. Counsel further submits that admittedly all payments sought to be recovered by the plaintiff arise out of the unscheduled items, which do not form part of the work order. Counsel further submits that for the unscheduled items a proper procedure was laid down as per the work order and the said procedure was not followed. Even otherwise, there is no single document which would show the admitted liquidated debt due by the defendants to the plaintiff.

6. I have heard counsel for the parties and considered their rival submissions. The relevant clause with regard to unscheduled items read as under:

"UNSCHEDULED ITEMS

For all unscheduled / additional items of works, you shall submit your quote for the same, before the start of works. The unscheduled items in the contract will be discussed in conjunction with out Architects and Project Managers, and shall be notified to you subsequently. The rates for all such unscheduled items required for the completion of the project will be subject to evaluation and rate verification by our Project Managers and final acceptance mutually.

For all further information and details please get in touch with out

project Managers M/s Perform Projects Management Pvt Ltd.

Your final offer dated 19-09-08 shall form a part of this work order

Please acknowledge and return the duplicate copy as a token of your acceptance."

7. No doubt the certificate of the Project Manager has been placed on record, however, the certificate does not show the amount due to the plaintiff by the defendants as no amount is mentioned in the certificate. The certificate reads as under:

CERTIFICATE OF SUBSTANTIAL COMPLETION

PROJECT : LAP Address: Hotel Samrat, Kautilya Marg, Chanakyapuri, New Delhi-110021

___________________________________________________

Client : Joie De Vivre Restaurant Private Limited

Project Manager: Perform Projects Management Pvt. Ltd.

Contractor: M/s EVAM Construction Pvt. Ltd.

B-1/34, basement, Malviya Nagar, New Delhi-110017

Scope of Work : Kitchen civil & electrical work and dismantling in the main hall

Word Order No. N/A Dated : September 22, 2008 __________________________________________________

The work under this contract has been reviewed and found to be substantially complete to the Project Manager's best knowledge, information and belief. The Owner can occupy and utilize the work

for its intended use.

The date of Substantial Completion of the Project is established as

September 23, 2009.

This is also the date of commencement of Defects Liability Period as per contract.

8. Order XXXVII Rules 1(2) reads as under:

(2) Subject to the provisions of sub-rule (1), the Order applies to the following classes of suits, namely:-

(a) suits upon bills of exchange, hundies and promissory notes;

(b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest arising -

                     (i)     on a written contract; or
                     (ii)    on an enactment, where the sum sought to be

recovered is a fixed sum of money or in the nature of a debt other than a penalty; or

(iii) on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only.

9. The present application is to be decided on the touch stone of the law laid down by the Apex Court in the case of M/s.Mechelec Engineers & Manufacturers Vs. M/s.Basic Equipment Corporation, reported at AIR 1977 SC 577, wherein parameters have been drawn by the court, which are to be considered by the Court while dealing with an application for leave to defend.

10. The Apex Court has held that in case the defendant satisfies the Court that he as a good defence, the plaintiff would not be entitled to a decree but in

case the defendant raises a triable issue including that he has a bona fide and reasonable defence although the defence may not be a positively good defence the defendant would still be entitled to unconditional leave to defend and it is only in those cases where the defence raised by the defendant is illusory, sham or practically moonshine the plaintiff would be entitled to a decree forthwith.

11. The relevant clause with regard to unscheduled items, which has been reproduced in paragraph 6 aforegoing, sets down a procedure with regard to unscheduled or additional items of work. As per the procedure laid down the contractor was to submit a quote for the same before the start of the work, the unscheduled items were then to be discussed with the architect and the project managers and thereafter the rates of all unscheduled items required for completion of the project were subject to valuation and rates verification by the project managers. In the absence of any written document to show that this procedure was duly followed and final valuation was carried out, a suit under Order XXXVII CPC would not be maintainable, as this is a triable issue which cannot be decided without evidence.

12. In my view, the defendants have been able to raise a tribal issue. A fair bona fide defence has also been raised and, thus, the defendants would be entitled to unconditional leave to defend. Accordingly, unconditional leave is granted to the defendants to contest the matter. It is made clear that any observation made in this application is only for the purpose of deciding this application for leave to defend and the same will not be treated as an expression on the merits of the matter.

13. Application stands disposed of.

CS(OS) 1473/2012

14. Having regard to the fact that the work order pertains to the year 2010

both parties agree that they will not seek any unnecessary adjournment and will complete the pleadings within the time allowed by this Court to enable the Court to decide the matter expeditiously.

15. Let written statement be filed within thirty days from today. Replication, if any, be filed within thirty days' thereafter. Parties will file documents, which are in their possession and power, within the same period.

16. Counsel for the parties principally agree for appointment of a Local Commissioner to record the evidence.

17. List the matter before Joint Registrar for admission/denial of documents on 17.12.2014.

18. List this matter before Court for framing of issues on 30.1.2015, when parties shall bring suggested issues to Court. On 30.1.2015 the Court will also issue directions for expedited trial.

G.S.SISTANI, J NOVEMBER 12, 2014 msr /pdf