M/S Attar Singh & Brothers vs Delhi Development Authority & ...
2018 Latest Caselaw 7466 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                      Date of decision: 18th December, 2018
+                               CS (OS) 2540/2008
       M/S ATTAR SINGH & BROTHERS                     ..... Plaintiff
                     Through: Mr. Sandeep Sharma and Ms. Konika
                              Mitra, Advocates. (M:9911901102)
                     versus

       DELHI DEVELOPMENT AUTHORITY & ORS. ..... Defendants
                    Through: Mr. Vaibhav Agnihotri, Mr. Bhrigu
                              Dhami and Mr. Preet Singh Oberoi,
                              Advocates   for   D-1     &    2.
                              (M:9999461507)
           CORAM:
       JUSTICE PRATHIBA M. SINGH

Prathiba M. Singh, J. (Oral)

I.A. 9217/2018 (delay in re-filing)

1. For the reasons stated in the application, delay in re-filing the restoration application is condoned. I.A. is disposed of. I.As. 9215/2018 (for restoration) & 9216/2018 (delay in filing) in CS (OS) 2540/2008

2. The present applications have been filed seeking restoration of the present suit, which was dismissed on 10th November, 2016 and seeking condonation of delay in filing of the application. Applications were preferred on 7th May, 2018. A perusal of the application shows that there are no reasons given whatsoever as to why a delay of such long period i.e. 499 days is to be condoned. The only reasons, that have been captured in the paragraphs 2 & 3 of the application, are set out herein below:

"2. That the present matter was taken up on 10.11.2016 by this Hon'ble Court. However, the counsel for the Petitioner was not able to be present on the said date. That as none appeared for the parties therefore the matter was dismissed by this Hon'ble Court for non-prosecution.

3. That the Petitioner was not aware regarding the same and only on 12.04.2018 the Petitioner was shocked know about the fact that his objections have been dismissed by this Hon'ble court."

The contents of these two paragraphs do not satisfy the basic requirements for condonation of delay. The delay is, thus, not liable to be condoned.

3. In any event, this Court has also examined the merits of the case. The award of the work order to the contractor, dates back to 14th October, 1982. The admitted case of the contractor is that the date of completion of the work order was 25th April, 1985. The demand for release of payment of Rs.25 lakhs was raised by the contractor with the DDA on 28th January, 1987. The arbitration clause was invoked on 27th February, 1992. By applying clause 7, the learned Arbitrator, vide his award dated 29th July, 2011, has held that as the Contractor did not choose to invoke the arbitration clause from 1987 to 1992, the claims are barred by limitation. Accordingly, the Contractor's claims were rejected.

4. The submission of Mr. Sandeep Sharma, learned counsel for Plaintiff/Contractor is that the final bill was prepared by the DDA only on 15th December, 1992 after arbitration was invoked. Thus, the claims are not barred by limitation. He relies on Inder Singh Rekhi v. Delhi Development Authority, AIR 1988 SC 1007 to argue that the preparation of the final bill itself gives rise to cause of action to the Contractor.

5. It is noted that this is the second round of arbitration, which has taken place between the parties. In the first round, the learned Sole Arbitrator had rejected the claims of the Contractor on 8th May, 2008. Vide order dated 30th November, 2010, this Court had set aside the award and fresh arbitration proceedings had been commenced. The award impugned in the present petition is the award passed in the second round of arbitration on 29 th July, 2011. The suit was dismissed on 10th November, 2016 for non- prosecution. The learned Arbitrator has, after analysing the various dates, held that between the year 1987 to 1992, the Contractor did not raise the claims and as per the clause, the Contractor could not wait for more than six months for seeking payment. Clause 7 reads as under:

"Clause 7 No payment shall be made for a work estimated to cost rupees five thousand or less till after the whole of the work shall have been completed and certificate of completion given. But in the case of work estimated to cost more than Rs. Five thousand, the contractor shall, on submitting the bill be entitled to receive a monthly payment proportionate to the part thereof then executed to the satisfaction of the Engineer-in-Charge, whose certificate of the sum so payable shall be final and conclusive against the contractor. But all such intermediate payments shall be regarded as payment by way of advance against the final payment only and not as payments for work actually done and completed, and shall not preclude the requiring of bad, unsound and imperfect or unskilled work to be removed and take away and reconstructed, or re-erected or be considered as an admission of the due performance of the contract, or any part thereof, in any respect or the accruing of any claims, nor shall it conclude, determine, or affect in any way the powers of the Engineer-in-Charge under these conditions or any of

them as to the final settlement and adjustment of the accounts or otherwise or in any other way vary or affect the contract. The final bill shall be submitted by the contractor within one month of the date fixed for completion of the work or of the date of the certificate of completion furnished by the Engineer-in-Charge and payment shall be made within three months if the amount of the contract plus that of additional items is upto Rs.2 lacks and in 6 months, if the same exceeds Rs.2 lakhs of the submission of such bill. If there shall be any dispute about any items of the work then the undisputed item or items only shall be paid within the said period of three months or six months or as the case may be. The contractor shall submit a list of the disputed items within thirty days from the disallowance thereof and if he fails to do this, his claim shall be deemed to have been fully waived and absolutely extinguished.

Wherever there is likely to be delay in recording detailed measurements for marking payments in the case of residential building, advance payments without detailed measurements for works done (other than foundations and finishing items) upto (a) lintel level (including sun shade etc.) and (b) slab level, for each floor, worked out at 75% of the tendered rates may be made in running account bills by the Engineer-in- Charge in his discretion on the basis of certificate from the Assistant Engineer to the effect that the work has been completed upto the level in question. The advance payments so allowed shall be adjusted in the subsequent running bill by taking detailed measurements thereof. Final payment shall be made only on the basis of detailed measurements."

6. A perusal of Clause 7 shows that the final bill has to be submitted by the Contractor within one month of the date of completion of work or the date of certificate of completion furnished by Engineer-in-Charge. The said

clause is not qualified with the term `whichever is earlier' or `whichever is later'. Thus, the cause of action arises at least insofar the Contractor is concerned, arises when the work was completed i.e., on 25 th April 1985. The claim is raised for the first time on 28th January, 1987. If the payment is not made within a period of six months, the Contractor has no option but to raise the claims within three years from the expiry of six months. The Contractor cannot say that he would wait endlessly for the DDA to finalise the final bill and then raise the claims. Delay by the DDA in finalizing the final bill would not increase or give the benefit to the Contractor to delay the raising of his claims. The DDA's reliance on Bindra Builders v. Delhi Development Authority, 192 (2012) DLT 565 is apt. In the said case, a learned Single Judge of this Court held as under:

"12. An analysis of the above clauses reveals that while RA bills are required to be raised by the contractor as and when the work is part complete, and the payments made against these are treated as advance payments, for the purposes of the final bill, two dates are relevant. One is "the date fixed for completion of the work" or such extended date as the case may be. The other is the "date of the certificate of completion" which has to be issued by the EIC. In both events it is clear from Clause 7 that it is the contractor who has to prepare the final bill. Mr. Kapur urged that in practice it was the DDA which invariably prepares the final bill and no contractor actually prepares it. Although this was disputed by Mr. Narula, the wording of Clause 7 does not envisage preparation of the final bill by the DDA but only the contractor. The absence of the words "whichever is later" qualifying the two dates mentioned is significant. It means that the limitation for submission of final bills would begin to run from "the date fixed for completion of the work", even where

the EIC has not issued a certificate of completion. It would not be open to the contractor to contend in such case that till such time the EIC did not issue the certificate of completion, the contractor was not obliged to submit a final bill. Sometimes a provisional certificate could be issued and the defects required to be rectified pointed out by DDA. It might be possible to argue that in such case the limitation for submission of final bill would not arise till a final completion certificate is issued by the EIC after verifying if the defects pointed out have been rectified. However, the position that emerges is that where DDA is in default by not issuing a provisional certificate or final certificate, and the date for completion of work has expired, the limitation for the contractor to submit his bill would begin running from the date fixed for completion.

...

20. To recapitulate the relevant facts in the present case, the work was admittedly completed even according to the plaintiff on 27th December, 1982. The flats in question were handed over by 1984. The plaintiff first sought payment of the final bill on 6th November, 1984 but even at that stage he did not submit the final bill. The requirement in Clause 7 is that "the final bill shall be submitted by the contractor within one month of the date fixed for completion of the work or of the date of the certificate of completion furnished by the EIC". Since the phrase 'whichever is later' is absent in this clause, the plaintiff could not afford to wait till the date the certificate of completion was issued by the EIC. The intention of the parties appears to be that the final bill was to anyway be submitted within three months of the date fixed for completion of the work. Admittedly, the final bill was not submitted by the plaintiff in this case within three months of the date of completion of the work, even if that is taken to be the date "fixed for completion of

work". As mentioned before, it was always possible for the plaintiff to have sent an estimated final bill stating that it would be subject to further revision after receipt of the certificate of completion from the EIC. The plaintiff kept writing letters on 15th February, 1985, 16th April, 1986 and 21st January, 1990 but made no attempt to invoke the arbitration clause to seek reference of the dispute to arbitration. Even if the reference to arbitration could not be said to be time barred since no intimation of the final bill being ready for payment was received by the plaintiff from the DDA, the fact remains that for over ten years after completion of the work in 1982 the plaintiff did not submit the final bill and failed to set in motion the legal process for recovery of the claims. The plaintiff thus allowed the claims to become hopelessly time barred. The learned arbitrator, therefore, came to the correct conclusion. In the circumstances, the court finds no ground made out for interference with the impugned award dated 29th September, 2000 of the sole arbitrator."

The claims were, thus, rightly held by the Ld. Arbitrator, to be time barred.

7. Decree, already passed making the award rule of the Court is, thus, upheld and is not liable to be set aside. Both the applications for restoration and condonation of delay are dismissed. Objections filed by the Contractor have also been considered on merits and do not deserve to be entertained.

PRATHIBA M. SINGH JUDGE DECEMBER 18, 2018/dk