Final Order 19

Order Details: COPY OF JUDGMENT
Pdf Text: IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 98/2024
CNR No. DLCT010002432024 DLCT010002432024
PRABH DAYAL OM PARKASH INFRASTRUCTURE LTD.,
Through its Authorized Representative,
Mr. Kailash Babu
Having registered office at:
2880, Sirkiwalan, Hauz Qazi,
Delhi-110094
Mobile No.8588809958
Email: salessupport@sheetaltanks.co.in
......Plaintiff.
Vs
MUNICIPAL CORPORATION OF GURGRAM.
Having its Office At:
Plot No. C-1, Tower-B,
2nd Floor, Info City-1,
Sector-34, Gurgaon,
Haryana-122004
Phone No. 18001801817
Email : ID.CMC@MCG.GOV.IN
...... Defendant.
SUIT FOR RECOVERY OF RS. 14,53,500/-
Date of institution of suit : 05.01.2024
First Date before this court : 09.04.2024
Date of hearing of final argument : 21.03.2025
Date of Judgment : 29.03.2025
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Appearance(s) : Ms. Chetna Bhalla, Shri Rajesh Kumar, Advocates.
Ld. Counsel for plaintiff.
Shri J.K. Tripathi, Adv. Ld. Counsel for the defendant.
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate
upon plaintiff’s suit for Recovery of Rs.14,53,500/- alongwith interest @
24% per annum pendentlite and future from the date of filing of suit till
its realisation. The plaintiff has also prayed for costs of the suit against
the defendant.
(B) CASE OF THE PLAINTIFF:-
2. Eschewing prolix reference to the pleadings crystallizing the same
the plaintiff has averred in the plaint that:-
2.1) The plaintiff is a body incorporated under the provisions of the
Companies Act, 1956, and is having its registered office at 2880,
Sirkiwalan, Hauz Qazi, Delhi-110006. Shri Kailash Babu is its duly
authorized representative who is fully conversant with the facts of the
present case and is competent to sign, institute, verify the pleadings of
the suit and to do all acts, for and on behalf of the plaintiff company.
2.2.) The plaintiff is engaged in the business of plastic container,
water tanks, chemical tanks, dust-bins, cycle rickshaw, water purifiers,
water overflow alarm system, wheel barrows and custom molded items.
2.3) The defendant is municipal corporation of Gurugram,
engaged in providing civic amenities and development etc. The
defendant had placed the order for purchasing Roadside dust-bin & Twin
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Bin from plaintiff and the plaintiff supplied the same against various
bills/invoices and statement of account on credit basis.
2.4) As per the statement of account maintained by the plaintiff
company, the defendant has failed to make the payment of the
outstanding amount of Rs.14,53,500/- and the defendant has tried to
evade the same on one pretext or the other compelling the plaintiff to
issue a demand notice dated 27.10.2022 calling upon the defendant to
pay the suit amount with interest @ 24% per annum, which was also not
replied to by the defendant.
2.5) The plaintiff has claimed that the cause of action arose on
various dates when the defendant has purchased the dustbin from the
plaintiff and again arisen on 27.10.2022 when the legal notice was issued
which was not responded to and finally when steps for pre-institution
mediation were taken under Section 12-A of Commercial Courts Act,
2015 resulting into issuance of non-starter report dated 06.11.2023 by the
concerned DLSA.
2.6) Hence the present suit for recovery of Rs.14,53,500/-
alongwith interests and costs.
(C) CASE OF THE DEFENDANT:-
3. On receipt of summons for settlement of issues, the defendant
contested the suit by filing a detailed Written Statement thereby taking
various preliminary objections as averred and mentioned herein under:-
3.1) The suit filed by the plaintiff is, pre-mature, without any
cause of action, the plaintiff has not approached the court with clean
hands and concealed material facts. It has also been averred that the suit
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is barred by jurisdiction as the work order was placed at Gurugram, the
work was executed in the area of Gurugram and office of defendant is
situated in Gurugram only. It has also been contended that the plaintiff
has no locus standi to file the present suit and therefore, the same
deserves to be rejected at threshold. It has further been contended that
the suit is pre-mature since the plaintiff did not give any access to the
defendant to inspect the sites where the dust-bin/material was installed
rather, the representative of the plaintiff who visited the office refused to
get the places of installation of dustbin inspected by the defendant
raising a plea that they were installed two-three years ago.
3.2) It has further been contended that the work orders vide
memo No. EE-HQ/MCG/2018/54642 dated 21.12.2018 for a sum of
Rs.69,25,000/- and Endst. No. EE-HQ/MCG/2019/34724 dated
24.08.2019 for Rs.6,92,500/- were for providing and installation of
dustbins at the designated places with the terms and conditions of the
work and the same cannot be treated as final and complete till all the
dustbins were duly supplied and installed also.
3.3) On merits, all the allegations made in the plaint have been
denied as incorrect. It has been contended that the work orders were
placed by the defendant for supply and installation of the dustbins within
the area of Gurugram and the defendant having categorically described
the sites where the dustbins were to be installed was under no further
obligations to give any further confirmation for installation. It has
further been contended that as per work orders Memo bearing No. EE-
HQ/MCG/2018/54642 dated 21.12.2018 for the value of Rs.69,25,000/-
and other work order bearing No. Endst. No. EE-HQ/MCG/2019/34724
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dated 24.08.2019 for the value of Rs.6,92,500/- were for supply and
installation of dustbins and against these work orders, the defendant has
already released an amount of Rs.56,00,000/- against first work order and
Rs.6,00,000/- against the second work order.
3.4.) It has further been contended that despite directions issued
by the defendant to the plaintiff, the places of installation of dustbins
were not shown to the defendant and accordingly, final payment could
not be released. However, when the representative of the plaintiff moved
an application dated 07.06.2021 for release of funds and extension of
time to complete the work, the officials of the defendant has responded
for verification of sites which was clearly refused by the plaintiff on the
plea that the installation of dustbins was done in MCG area 2-3 years
ago at different locations. It has further been contended that since the
plaintiff did not get the installation site inspected by the officials of the
defendant, the remaining funds could not be released, as such the claim
of the plaintiff is not only pre-mature but also untenable in law.
3.5) The defendant has finally denied that the liability of
Rs.14,53,500/- while also disputing the liability to pay any interest as
claimed. The defendant has prayed for dismissal of the suit with
exemplary costs.
4. Replication to the Written Statement has not been preferred by
the plaintiff as per submission dated 27.08.2024 before the court.
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(D) CRYSTALISING THE DISPUTE :-
5. On the pleadings of the parties and documents placed on record the
following issues were framed for adjudication vide order dated
12.11.2024.
ISSUES.
(i) Whether the suit of the plaintiff is not filed
in the court of jurisdiction on account of
the fact that no cause of action has arisen
within the jurisdiction of this court ? OPD.
(ii) Whether the suit of the plaintiff is pre-
mature on account of non-access of the
defendant for inspection of the installed
dustbins, if so, its effect? (OPD)
(iii) Whether the plaintiff is entitled to recover
an amount of Rs.14,53,500/- against the
defendant ?OPP
(iv) Whether the plaintiff is entitled to any
interest on such amount ? if so, at what
rate and for what period ?OPP
(v) Relief.
(E) EVIDENCE OF PLAINTIFF.
6. Plaintiff, in support of its case, got examined its Authorized
Representative Shri Kailash Babu as PW1 and reiterated the contents of
the plaint on oath in his affidavit Ex.PW1/A. He got exhibited the
Authority Letter in his favour executed by the director of the plaintiff
company as Ex.PW1/1, Tax Invoice bearing No.PD1467 dated
14.01.2019 as Ex.PW1/2, its E-way bill as Ex.PW1/3, Tax Invoice
bearing No.PD1475 dated 15.01.2019 as Ex.PW1/4, its E-way bill as
Ex.PW1/5, Tax Invoice bearing No.PD273 dated 15.06.2019 as
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Ex.PW1/6, its E-way bill as Ex.PW1/7, Tax Invoice bearing No.PD660
dated 26.09.2019 as Ex.PW1/8, its E-way bill as Ex.PW1/9, Tax
Invoice bearing No.PD666 dated 27.09.2019 as Ex.PW1/10, its E-way
bill as Ex.PW1/11, Ledger Account from 01.04.2018 to 31.03.2020 as
Ex.PW1/12, Certificate u/s 65-B of the Indian Evidence Act, 1872 as
Ex.PW1/13, Certificate u/s 2A of the Banker Books of Evidence Act, as
Ex.PW1/14, Legal Notice dated 27.10.2022 as Ex.PW1/15 and Non-
Starter Report issued by the concerned DLSA as Ex.PW1/18. He has
deposed that despite various demands and legal notice, the defendant has
failed to pay the payments to the plaintiff. It has further been deposed
that the suit is correct and the defendant is liable to pay the outstanding
amount alongwith interest and costs.
7. During cross-examination, Ld. Counsel for defendant has tried to
puncture the testimony of PW1 on the point of his competence and
knowledge of the tender, execution of agreement between the parties,
compliance of terms & conditions of the Work Order, non-inspection of
the sites and other aspects including payment for the work done under the
Work Orders. The witness/plaintiff has admitted that it was the
responsibility of the plaintiff to get the site inspected after installation.
He has shown his ignorance about the condition for inspection of the
sites by the officers of the defendant after installation of the dustbins by
the plaintiff. He has also shown his ignorance about the duration in
which the aforesaid work was required to be completed by the plaintiff.
He has denied the suggestion that despite the payments of Rs.56,00,000/-
and Rs.1,68,000/-, the plaintiff did not get inspected the site of the
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installation by the officials of the defendant. He has again shown
ignorance about the date, place or the name of the officials of the
defendant who have visited the site and the details thereof as no
inspection was ever got conducted by the plaintiff. He has denied the
suggestion that the bills submitted were pre-mature in so far as the same
required a prior inspection before submission of the bill, voluntarily
adding that the payment was being received by the plaintiff on
continuously basis but was stopped suddenly. He has deposed that he
had approached the office of defendant regarding payment in 2018.
Finally, he has denied the suggestion that even today, the plaintiff has not
requested the officials of the defendant to inspect the installation site
orally or in writing and his claim is false and pre-mature since no such
inspection were got conducted by the plaintiff.
8. No other witness was examined by the plaintiff and the evidence of
the plaintiff was closed by his statement on 29.01.2025.
(F) DEFENDANT’S EVIDENCE :-
9. The defendant in its defence got examined one Shri Prem Singh,
Assistant Engineer, Section-34, Municipal Corporation of Gurugram,
Haryana as DW1 who has filed his evidence by way of affidavit
Ex.DW1/A. He reiterated the contents of the Written Statement on
oath. He got exhibited the copy of Work Order No. EE-
HQ/MCG/2018/54642 dated 21.12.2018 as Ex.DW1/A, Work Order No.
EE-HQ/MCG/2019/34724 dated 24.08.2019 as Ex.DW1/B, Office Note
as Ex.DW1/C(colly), Attested copy of List of Location Description Sheet
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for 1100 places as Ex.DW1/D, Attested copies of Lists of Local Resident
Association & Local Municipal Counselor as Ex.DW1/E and Ex.DW1/F
respectively, copies of the Note of proposal of payments of
Rs.56,00,000/- and Rs.6,00,000/- as Ex.DW1/G and Ex.DW1/H
respectively.
10. DW1 also deposed in his evidence that despite making
payments/performing their part, the plaintiff or its subordinates did not
provide any opportunity to make an access to get inspected the places
where the plaintiff had installed the dustbins. He has further deposed
that the representatives of the plaintiff did not allow the checking of the
sites on the pretext that they have installed the dustbins in the MCG area
2-3 years ago on different locations and at present he cannot visit the site
to show the installations of dustbin in different locations/places of
Gurugram. And finally, he deposed that the delay in releasing the fund
was not done by the defendant but it was delayed due to non-completion
of work done & not allowing the defendant to inspect the installed
dustbin. He has deposed that the suit of the plaintiff is liable to be
dismissed as misconceived and bereft of cause of action with
exemplary costs.
11. The witness was subjected to a detailed cross-examination by Ld.
Counsel for the plaintiff, during which DW1 has deposed that the work
Order Ex.DW1/A for an amount of Rs.69,25,000/- and Ex.DW1/B for an
amount of Rs.6,92,500/- were opened on GeM Portal on 04.12.2018 and
07.08.2019 respectively and the plaintiff company was successful bidder
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for both the contracts for supply and installation of 1000 and 100
dustbins respectively. He has admitted that the plaintiff company has
supplied a total number of 1100 dustbins to the defendant. The witness
has been confronted with certain documents at pages No.148 to 155 of
Ex.DW1/PX-1 and pages No.261 and 268 to 271 of Ex.DW1/PX-2 to
which the witness has denied the installation by voluntarily stating that
the same relates to part payment of the supply of dustbins and not
installation thereof. He has further deposed that the defendant has not
filed any records regarding the unused/uninstalled dustbins supplied by
the plaintiff to the defendant. He has further deposed that the defendant
does not have any record to show that it has written any letter to the
plaintiff informing it of non-installation of dustbins on stipulated sites
and non-completion of the obligations under the contract and finally, he
has denied the suggestion that the plaintiff has duly completed the
installation of dustbins as per the contract according to defendant’s own
document.
12. No other witness was examined by the defendants and the
evidence of the defendants was closed vide statement dated 11.03.2025.
(G) ANALYSIS & DETERMINATION:-
13. I have heard the arguments addressed by the Ld. Counsels for the
parties, perused the entire record including the oral and documentary
evidence. I have given a thoughtful consideration to the same. My issue-
wise determination is as under:-
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ISSUE No.1. “Whether the suit of the plaintiff is not filed in the court of jurisdiction on account of
the fact that no cause of action has arisen within the jurisdiction of this court ? OPD.”
14. The onus of proving this issue has been held upon the defendant
who has taken a preliminary objection in its Written Statement that the
court has no territorial jurisdiction to adjudicate upon the present suit as
the defendant is situated at Gurugram, the order was placed from
Gurugram and the plaintiff company had to install the Dustbins at
Gurugram which falls within the jurisdiction of Gurugram Municipal
Corporation and as such no cause of action has taken place within the
jurisdiction of this court.
15. Ld. Counsel for the defendant Shri Tripathi has argued that
dealings in the present case was done at Gurugram, formalities of
agreement was signed by both the parties in the office of defendant at
Gurugram, work orders were also placed at Gurugram, Installation of
dustbins was to be done at Gurugram area only and as such the cause of
action in toto has arisen in Gurugram, Haryana. He has further relied
upon the Section 20 of the CPC to argue that a suit must be filed where
the defendant resides, carries on business, or where the cause of action
either in full or part arises which the plaintiff has failed to establish.
16. Ld. Counsel for the plaintiff Ms. Bhalla on the other hand, has
argued that the registered office of plaintiff is situated in Delhi and the
tender was filled and received by the plaintiff in Delhi itself, the invoices
and E-way bills Ex.PW1/2 to Ex.PW1/11 were also raised from Delhi
and the dustbins were also supplied from Delhi only as can be made out
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from the E-way bills Ex.PW1/3,5,7,9 and 11. It has also been argued
that even the payments which have been made by the defendant has been
received in the plaintiff’s bank account at Delhi only and as such only
Delhi Courts very well have jurisdiction to entertain the instant suit on
account of cause of action. Ld. Counsel for the plaintiff has additionally
argued, during the course of arguments, that this is a case where the
principle of debtor must seek the creditor applies and relied upon the
pronouncement of law laid down by our own Hon’ble High Court in
Shradha Wassan and Ors. Vs. Anil Goel and Anr. 2009 SCC Online
Del 1285 besides relying upon the judgment of our own Hon’ble High
Court in Satyapal Vs. Slick Auto Accessories (P) Ltd (2014) SCC onlin
Del.998. The court shall examine the respective contentions of the
parties in this regard in the light of evidence led.
17. At the outset, it may be seen that the present case is based on the
outstanding amount in respect of supply of Dustbins supplied by the
plaintiff to the defendant vide Work orders Ex.DW1/A and Ex.DW1/B.
The invoices alongwith e-way bills Ex.PW1/2 to Ex.PW1/11 have been
issued by the plaintiff in favour of defendant from time to time. The
quality of material and number of dustbins have been mentioned in the
aforesaid Work Orders Ex.DW1/A to Ex.DW1/B. The payments have
been received by the plaintiff at Delhi only as shown Ex.PW1/12.
Though certainly, the defendant is situated in Gurugram, Haryana and
the supply and installation are also required to be done at Gurugram only,
however, when the cause of action is considered u/s 20 (c) of the CPC, it
arises partly in Gurugram and partly in Delhi. It may be seen that the
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plaintiff has applied for the tender from its Delhi office on GeM portal
and has been successful in obtaining the same. DW1 Shri Prem Singh
though in his deposition has tried to mention by way of his affidavit
regarding the jurisdiction of courts at Gururam on the basis of work
orders Ex.DW1/A and B, the description sheet mentioning the places
where the dustbins are to be installed as Ex.DW1/D, E and F but during
cross-examination, he has duly admitted that the work orders Ex.DW1/A
and B for a sum of Rs.69,25,000/- and Rs.6,92,500/- respectively were
opened on GeM portal where the plaintiff was found successful in respect
of both the contracts. Admittedly, the supply of dustbins has been made
by the plaintiff vide various invoices inter-alia Ex.PW1/2, 4,6,8 and 10.
These supplies as per the e-way bills Ex.PW1/3,5,7,9 and 11 have been
made from Delhi only and the same has been clearly reflected in the
aforesaid documents. Interestingly, the defendant has duly admitted
these documents in his affidavit of admission- denial of documents and
these documents have been collectively exhibited as Ex.P-1 also. It is
not denied that the payments made by the defendant as reflected in the
ledger Ex.PW1/12 are also received at Delhi. This being so, it can not be
said that the cause of action has only arisen in Gurugram and courts at
Delhi have no jurisdiction.
18. The Hon’ble Delhi High Court in Shradha Wassan (supra) after
examining a number of judgments has succinctly held that when the
money is expressly or impliedly payable under a contract and payments
are to be made at Delhi, or received as such, a part of cause of action
arises. Relying upon the pronouncement of law laid down by Hon’ble
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Supreme Court in A.B.C Laminart Pvt. Ltd. Vs. A.P. Agencies, (1989)
2 SCC 163, the Hon’ble court has even laid down that if a legal notice
demanding the payment, preceding the suit, was sent from Delhi for
payments at Delhi, the principle of debtor must seek the creditor applies
with the exception of a promissory notes. The principle is applied in
respect of payments received at the place of plaintiff under an express
or implied contract and unless there is a clear ouster of jurisdiction, the
place of the plaintiff shall also be the place where a legal action can be
filed. This principle was succinctly followed in subsequent judgments of
our own Hon’ble High Court in TKW Management Solutions Pvt.
Ltd. Vs. Sherif Cargo and Anr. (2023) SCC Online Del. 593, by
holding the jurisdiction of courts at Delhi on the ground that the
payments were received in Delhi.
19. In the instant case not only all the payments made by the defendant
were received by the plaintiff in Delhi but also legal notice dated
27.10.2022 Ex.PW1/15 was sent by the plaintiff from Delhi calling upon
the defendant to make payments at Delhi only. Furthermore, the tender
was applied on GeM at Delhi only resulting into issuance of work orders
Ex.DW1/A and B. Interestingly, the invoices Ex.PW1/2, 4,6,8 and 10
which were duly admitted by the defendant also contain an exclusive
jurisdiction clause conferring exclusive jurisdiction to Delhi in respect of
all the disputes. Furthermore, in the light of the pronouncement of law
laid down by Hon’ble High Court, in the judgments referred to above, the
principle of debtor must seek the creditor also squarely applies in the
facts and circumstances of the case. Thus, taken on the yardstick of
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preponderance of probability and on the basis of the aforesaid discussion,
while the defendant has failed to prove this issue in its favour, the
plaintiff has established the jurisdiction of courts at Delhi. This issue is,
accordingly, decided against the defendant and in favour of the
plaintiff.
ISSUE No.2 and 3. “Whether the suit of the plaintiff is pre-mature on account of non-access of
the defendant for inspection of the installed dustbins, if so, its effect?OPD.”
“Whether the plaintiff is entitled to recover an amount of Rs.14,53,500/-
against the defendant ?OPP”
20. The onus of proving issue No.2 has been held upon the defendant
while that of issue No.3 is upon the plaintiff. These two issues are taken
together as they are inextricably inter-connected, in as much as while
issue No.3 relates to entitlement of plaintiff to the relief sought, issue
No.2 is relatable to the only defence taken by the defendant during the
course of proceedings. Further, the evidence led on these issues is also
common.
21. Now while the plaintiff has claimed recovery of Rs.14,53,500/- on
the basis of supply of 1100 dustbins on credit basis to the defendant, the
part payment of which, the defendant has allegedly withheld without
rhyme or reason and has failed to pay despite service of legal notice
dated 27.10.2022 Ex.PW1/15. Though, for supply of these dustbins was
pursuant to the work orders dated 21.12.2018 and 26.08.2019
Ex.DW1/A & B in two tranches of 1000 and 100 respectively, the
plaintiff has neither made any pleadings nor has filed or relied upon the
aforesaid two work orders. Rather, the plaintiff has primarily relied
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upon the tax invoice Ex.PW1/2, 4, 6, 8 and 10, their respective e-way
bills Ex.PW1/3, 5, 7, 9 and 11 and its statement of Account/ledger for the
period 01.04.2018 to 31.03.2020 Ex.PW1/12 to show its outstanding
amount to the tune of Rs.14,53,500/- as claimed in the instant suit. The
defendant on the other hand, has vehemently relied upon the work orders
Ex.DW1/A and B besides relying upon its list of locations for installation
of the dustbins Ex.DW1/D, E and F. The defendant has also relied upon
copy of internal note sheet Ex.DW1/G & H leading to the payments of
Rs.56,00,000/- and Rs.6,00,000/- respectively in respect of these work
orders which is not in dispute. The only contention raised by the
defendant is that the work orders were for supply and installation of 1100
dustbins and because the same has neither been installed by the plaintiff,
nor an inspection of the same was allowed to its representative, the
remaining payment was not released and the suit as such is pre-mature in
the absence of such inspection by the defendant.
22. Interestingly, if the oral as well as the documentary evidence in this
regard is carefully perused, the defendant in its deposition during cross-
examination of DW1 has admitted that the plaintiff has supplied 1100
dustbins to the defendant. Now, if these work orders dated 21.12.2018
and 24.08.2019 Ex.DW1/A and B respectively are carefully perused,
they contain the description of work as providing and installation of twin
dustbins with its rate at Rs.6925/- per unit. It also contains the details
thereof and terms and conditions of execution of work by the plaintiff.
The work was required to be monitored by a committee constituted by a
commissioner of municipal corporation of Gurugram and also mention
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the name of nodal person besides the terms and conditions contained in
one document. Now no such pleadings or evidence regarding this
document has come on judicial record. As such, the consequences of
non-installation of dustbins despite supply have not been brought on the
judicial record for the purpose of determination. The sole witness of the
defendant has admitted that the list of location for installation of dustbins
in MCG area was duly provided to the plaintiff and got exhibited the
same on record as Ex.DW1/D, E and F. Interestingly, there is not even a
single document on record to show that the installation has not been
actually done by the plaintiff on these sites. There is no communication
worth a name, either by a letter or even an e-mail informing the plaintiff
that the installation of dustbins has been partly made or the execution
of the work order has not been done as per the specifications. On the
contrary, the witness of the defendant DW1 Prem Singh who is stated to
be the concerned Assistant Engineer in respect of the work order during
cross-examination has admitted that the defendant has not filed any
record regarding the unused or uninstalled dustbins supplied by the
plaintiff to the defendant. He has rather admitted that the defendant has
no such record to show that it has written any letter to the plaintiff
informing it of non-installation of dustbins on stipulated sites and non-
completion of obligations under the contracts. The conduct of the
defendant is also worth noting which can be made out from the document
relied upon by the defendant itself, more particularly, the note sheet and
proposals Ex.DW1/G and H in respect of the instant contract awarded to
the plaintiff. During cross-examination, the witness was specifically
confronted with part of the aforesaid document exhibited on record as
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Ex.DW1/PX-1 and Ex.DW1/PX-2 to ask that the plaintiff has duly
installed the dustbins supplied by it. If these documents are carefully
perused, the same clearly shows that the work was shown to be
completed as per PWD specification and case is recommended for
payment accordingly. The document Ex.DW1/PX-2 shows the remarks of
Executive Engineer concerned written in his own handwriting “Work of
Supply and Installation of twin dustbin is verified and checked file and
found attached Test Certificate of plastic, bill is duly checked and
verified by JE & AE (HQ). Keeping in view the above facts, payment of
above work is recommended.” One of these documents also show a
sheet regarding deviation and variation which contains detailed column
regarding the quantity as per DNIT and quantity as per site. This
document in this format appears to have been created for the purpose of
noting down deviations and then leading to consequences in general
work contracts but in this case even the same has been duly verified by
not only the JE, AE but also by the Executive Engineer (HQ). Defendant
has admittedly made a very large payment of substantial sum of
Rs.56,00,000/- and Rs.6,00,000/- respectively on the basis of aforesaid
internal note sheet, measurement books, deviation sheets and verification
done by Engineers at all level. The defendant being an instrumentality
of State is expected to work as per rules and regulations and if the
plaintiff was at fault in execution of work for installation of dustbins
under the work order, it was required to issue due notice or take any steps
for cancelling the contract, imposing penalty or even blacklisting the
contractor rather than merely withholding part payment that to without
disclosing the reasons thereof. Furthermore, even if the best case of the
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defendant is taken, on receipt of legal demand notice, the defendant was
required to respond or say that the payment has been stopped for reasons
of non-installation of dustbins supplied by the plaintiff. It is also not
clear from the pleadings or the evidence or supported by any document
of the defendant as to how many dustbins so supplied by the plaintiff
were not installed or wrongly installed. This being so, and taken on the
yardstick of preponderance of probabilities while the defendant has
utterly failed to prove issue No.2 in its favour, the plaintiff has been
successful in establishing its entitlement.
23. However, the amount to which the plaintiff shall be entitled is
required to be determined by the court and it is a settled proposition of
law that mere statement of account in itself is sufficient to fasten the
liability upon the defendant and the plaintiff is required to prove the same
by way of corroborative evidence. (2000) 1 SCC 434 Ishwar Dass Jain
(Dead) through LR’sVs. Sohan Lal (Dead) by LR’s,
24. Applying the aforesaid ratio of law to the facts of the case, the
plaintiff has duly proved the entries in the statement of account
Ex.PW1/12 by way of the respective invoices Ex.PW1/2, 4, 6, 8,10 and
the supply of goods have been duly proved by way of e-way bills
Ex.PW1/3, 5, 7, 9, 11. The defendant has duly admitted these invoices
and the e-way bills in its affidavit of admission-denial of documents,
though has refuted Ex.PW/12, however, on what basis Ex.PW1/12 has
been refuted or denied has not been explained by the defendant by way of
any cogent or clear evidence.
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25. During the course of arguments, Ld. Counsel for the defendant
has also raised issue of limitation on the ground that the transactions
pertains to the year 2018 and 2019 while suit has been instituted in the
year 2024. The court shall take up the issue of limitation which is a
legal issue, which the court is required to determine for the purpose of
deciding the entitlement of plaintiff to the relief claimed. As per
Section 3 of the Limitation Act, 1963, any suit, application or appeal
has to be filed within the period of limitation as prescribed under the
schedule annexed to the Limitation Act and subject to the provisions
contained in Section 4 to 24 (inclusive). This has to be done
irrespective of the fact whether limitation has been set up as a defence
or not. It is a settled proposition of law that law of limitation is a law
of repose, peace and justice which bars the remedy after the lapse of
particular period by way of public policy and expediency. Reliance is
placed on AIR 1991 Kerala 83 Craft Centre vs. Koncherry Coir
Factories. It may be seen that the suit is for recovery of amount
outstanding against the defendant for the invoices/e- way bills raised
by the plaintiff company against the supply and installation of dustbins
to the defendant. The case of the plaintiff company is based on the
invoices raised between the period 14.01.2019 and 27.09.2019 towards
the supply and installation of dustbins to the defendant. The statement
of account Ex. PW1/12 (Colly.), inter-alia, contains the entries of the
credits and debits of the payments/transactions taken place between the
plaintiff and the defendant during the above mentioned. The first
invoice was raised by the plaintiff on 14.01.2019 against the defendant
and the last invoice was raised by the plaintiff on 27.09.2019 against
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the defendant. As per article 14 of the Schedule annexed to the
Limitation Act, 1963, the period of limitation is 3 years from the date
of delivery of the goods. The Statement of Account Ex. PW1/12
(Colly.) has been duly proved by filing the Certificate u/s.65-B of
Evidence Act Ex. PW1/13. Further, the aforesaid statement of account
shows the credit of Rs. 5,40,000/- which the defendant has made to the
plaintiff on 11.12.2019. If the date of first invoice dated 14.01.2019 is
considered for reckoning of limitation, the present suit should have
been filed on or before 14.01.2022. If the date 11.12.2019 of the last
payment made by the defendant is considered for reckoning the
limitation then by virtue of Section 19 of Limitation Act, 1963, the
present suit should have been filed on or before 11.12.2022, however,
the present suit has been filed by the plaintiff on 05.01.2024. It would
be relevant to mention here that on account of Covid-19 pandemic
situation, a period from 15.03.2020 to 28.02.2022 is required to be
excluded from the period of limitation in terms of the judgment passed
by the Hon’ble Supreme Court of India in SMWP © No. 3/2020 In re:
Cognizance for Extension of Limitation (2022) 3 Supreme Court
cases 117 and ARB.P 427/2024 G4s Secure Solutions (India) Pvt
Ltd V Matrix Cellular (International) Services Ltd. In its recent
judgment Babasaheb Raosaheb Kobarne & Anr. V. Pyrotek India
Private Limited & Ors, in SLP No. 2522/2022 vide pronouncement
dated 09.05.2022 the Hon’ble Supreme Court of India has held that:
‘…...the period from 15.03.2020 till 28.02.2022
shall have to be excluded for the purposes of
limitation……...the said order shall also be
applicable with respect to the limitation period
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prescribed under the Commercial Courts Act,
2015 also…’
Hence, applying the ratio of the aforementioned judgments, the
present suit having been filed on 05.01.2024 is well within the period
of limitation.
26. Thus, on the basis of aforesaid discussion, the plaintiff has been
successful in establishing its entitlement on the yardstick of
preponderance of probabilities for recovery of Rs.14,53,500/- against the
defendant while the defendant has utterly failed to prove its contention
regarding the same being pre-mature. Issue No.3 is accordingly decided
in favour of the plaintiff and against the defendant, while issue no.2 is
decided against the defendant and in favour of plaintiff.
Issue no.4: “Whether the plaintiff is entitled to any interest on such amount, if so, at what
rate and for what period ?OPP”
27. The onus of proving this issue was also held upon the plaintiff
who has claimed an interest @ 24% per annum on the outstanding
amount pendentlite and future. Though there is a stipulation of 24% per
annum on the invoice Ex.PW1/2, 4, 6, 8 and 10 , however, the same does
not specify as to when the bills become outstanding as no fixed period
for payment of bills has been specified or agreed upon. There is nothing
on record to suggest that such stipulation was ever agreed to specifically
between the parties. In the absence of any agreement to show the same,
the court shall be left with no option but to advert to the provisions of
section 34 of CPC and provisions of Interest Act since the amount is
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outstanding. However, Hon’ble Supreme court in a number of
judgments reported as Pt. Munshi Ram @ Associates (P) Lt. Vs.
DDA, 2010 SCC Online Delhi 2444, Rajendra Construction Co. Vs.
Maharashtra Housing & Area Development Authority and others,
2005 (6) SCC 678, McDermott International Inc. Vs. Burn Standard
Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State Road
Transport Corporation Vs. Indag Rubber Ltd., (2006) 7 SCC 700,
Krishna Bhagya Jala Nigam Ltd. Vs. G. Harischandra, 2007 (2)
SCC 720 & State of Rajasthan Vs. Ferro Concrete Construction Pvt.
Ltd. (2009) 3 Arb. LR 140 (SC) has repeatedly mandated that courts
must reduce the high rates of interest on account of the consistent fall in
the rates of interest in changed economic scenario. Under the facts and
circumstances of the case, keeping in view the nature of transactions of
the case and the aforesaid settled law, court is of the considered opinion
that interest of justice would be met, if an interest @ 6% per annum is
granted to the plaintiff on the outstanding amount pendentlite and future
from the date of filing of the suit till the date of its realisation. This issue
is decided accordingly.
(H) CONCLUSION:-
ISSUE No.5: Relief.
28. In view of the aforesaid discussions and finding of the court on
the aforesaid issues, the court is of the considered opinion that the
plaintiff has been able to successfully prove its entitlement to the
recovery against the defendant. The suit of the plaintiff is, accordingly
decreed against the defendants for a sum of Rs.14,53,500/- with simple
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interest @ 6% per annum pendentlite and future from the date of filing of
the suit till the date of its realisation.
29. In the specific facts and circumstances of the case, the plaintiff shall
also be entitled to the costs of the suit throughout.
30. Decree sheet be drawn accordingly.
31. File be consigned to record room after due completion.
PRONOUNCED IN OPEN COURT .
ON THIS 29th MARCH 2025.
(MUKESH KUMAR GUPTA)
DISTRICT JUDGE (COMM. COURT)-07
CENTRAL/DELHI
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