Interim Order 14

Order Details: COPY OF ORDER
Pdf Text: 10CS (COMM)100/24
M/s Rysa Infratech Pvt. Ltd. Vs. The Chief Engineer Pune Zone And Anr
25.11.2024
Order on application filed by the defendant no.2 u/O 7 Rule 11 r/w Section 151 of
CPC filed by the defendant no.2
1. This order of mine will dispose of an application filed by the defendant no.2
u/O 7 Rule 11 r/w Section 151 of CPC.
2. I have heard the counsels for the parties.
3. Sh. Arjun D. Singh, Ld. Counsel for defendant no.2 has submitted that the
suit of the plaintiff is premature, because, as per the terms of the work order dated
11.04.2020, the payment was required to be made by defendant no.2 to the plaintiff
on back to back basis and submitted that the value of the contract was Rs.
4,01,55,000/- out of which, the defendant no.2 has paid Rs. 3,78,74,550/- to the
plaintiff and an amount of Rs. 22,80,450/- is yet to be paid by defendant no.1 to
defendant no.2 and on receiving of the said amount, defendant no.2 will pay the
said amount to the plaintiff and submitted that since this case is premature and
without cause of action, as prior to the receiving of amount of Rs. 22,80,450/-,
from the defendant no.1, the plaintiff has filed the present suit. He has also
submitted that the plaintiff has failed to do the civil work, so, the defendant no.2
had to get the civil work done in this project from another person, so, the plaint of
the plaintiff is liable to be rejected, as per provisions of Order 7 Rule 11 of CPC
and prayed for allowing this application.
4. On the other hand, Sh. Chaman Sharma, Ld. Counsel for the plaintiff has
submitted that the defendant no.1 and defendant no.2 had entered into a contract
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and the contract of total amount of Rs. 4,01,55,000/- was entered into between the
defendant no.2 and the plaintiff. He has also submitted that defendant no.2 has
paid an amount of Rs. 2,96,09,751/- and an amount of Rs. 73,81,953/- alongwith
interest @ 18% per annum is yet to be paid by the defendants. He has also
submitted that in view of some hardships, civil work in the project could not be
done by the plaintiff and the plaintiff has placed on record the deductions at page
no. 64 wherein, the deduction of Rs. 33,13,296.73 paise/- is mentioned (in view of
not doing of civil work) and submitted that the plaintiff is not claiming the said
amount of Rs. 33,13,296.73 paise/- as the plaintiff could not do the civil work in
the project. He has also submitted that the counsel for defendant no.2 has
submitted that an amount of Rs. 22,80,450/- is withheld by defendant no.1, but,
suit amount is Rs. 73,81,953/- and submitted that if the contention of Ld. Counsel
for defendant no.2 is taken to be true even then, only an amount of Rs. 22,80,450/-
is alleged to have been withheld by defendant no.1. Even otherwise, defendant
no.2 has failed to make payment of suit amount to the plaintiff and submitted that
at the time of disposal of application u/s 7 Rule 11 of CPC, only the averments
made in the plaint are required to be looked into and the defence of the defendant
cannot be looked into and submitted that since from the perusal of the plaint, it is
clear that the present suit has been filed by the plaintiff for recovery of Rs.
73,81,953/- alongwith interest @ 18% per annum and the cost of the suit, so, the
application filed by the defendant no.2 u/O 7 Rule 11 of CPC may be dismissed.
5. I have given thoughtful consideration to the submissions made by Ld.
Counsels for the parties and perused the record.
6. The perusal of the record reveals that the plaintiff has filed the present suit
for recovery of Rs. 73,81,953/- stating therein that the defendant No.1 is the Chief
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Engineer of Pune Zone Military Engineering Services, and the defendant No.2 is a
registered contractor with the Military Engineering Services, while the plaintiff is
also authorized to do the work with the Military Engineering Services.
7. It is further averred that the defendant No.1 awarded the work for
completion of incomplete work for construction of Command Hospital and OTM
Accn. Southern Command Pune to the defendant No.2, which also include the
Provisions of STPs and ETPs in “Prime Cost Sum” on which, the defendant No.2
Quoted 15% as overcharged upon the payment to be paid to the plaintiff.
8. It is further averred that the defendant No.1 nominated the plaintiff through
E-tendering process conducted by the GE(I)(P)(CH) Pune under delegation and
were entrusted with the responsibility of executing specialized work under PC
SUM, approved by defendant No.1 on 2nd April 2020 and further formally
intimated by GE(I)(P)(CH) vide their letter No. 8031/2667/E8 Dated 13/04/2020
to execute the STP & ETP work pertaining to BOQ item No.2.80 of (Pc Sum)
through defendant No.2.
9. It is further averred that a formal offer was made to the defendant No.2 by
the plaintiff on 09/04/2020, which was duly accepted by the defendant No.2 on
11/04/2020 and after acceptance of the offer, the defendant No.2 negotiated with
plaintiff to execute the civil work of STPs and ETPs, on the basis of the payment
to be made on measured actual executed quantity, since the defendant No.2 had
their T&P and labor available at the site for execution of work in the main
Contract, Rates and provisional quantities were agreed and signed between the
defendant No.2 and plaintiff.
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10. It is further averred that the plaintiff has completed the work diligently, in
accordance with the tender’s conditions issued to plaintiff. However, the main
contractor i.e. the defendant No.2 continuously delayed the payment during the
occurrence of the work and it was intimated to the defendant no.1, time to time.
And after completing the work and taking the tax paid vouchers from plaintiff, the
defendant No.2 is imposing unilateral conditions and holding a huge amount
causing plaintiff in severe financial strain, affected the operations of plaintiff and
hampered the ability to continue working of plaintiff on the other project of
Military Engineering Services.
11. It is further averred that the defendant No.2 released only Rs. 2,96,09,751/-
(Rupees Two Crore Ninety Six Lakh Nine Thousands Seven Hundred and Fifty
One only) against 07 RARs (Running Account Receipt) stating as received from
Military Engineering Service(MES) i.e. the defendant No.1, but refused to release
Balance payment of Rs. 73,81,953.00 (Rupees Seventy Three Lakh Eighty One
Thousand Nine Hundred Fifty Three Only) after deducting Rs.31,63,296/- (Rupees
Thirty One Lakh Sixty Three Thousand Two Hundred Ninety Six Only) on account
of civil work carried out by the defendant No.2 and 1% TDS to be deducted on
total contract value by the defendant no.1 and disputed the balance payment.
12. It is further averred that the tender considered for nomination under PC
SUM was invited by the subordinate office of defendant No.1 with due procedure
and even in the tender, the name of the main contractor was not mentioned hence
all bidders submitted their bids to the subordinate office. Defendant No.1
nominated plaintiff to work with the defendant No.2 and plaintiff had worked with
the defendant No.2 only because the defendant No.1 nominated to the plaintiff to
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work with the defendant No.2. So, the defendant No.1 is equally responsible to
make the balance payment of plaintiff as per the tender.
13. It is further averred that despite of several requests by plaintiff to make the
payment of balance amount of work, the defendant No.2 did not make the payment
and it is very surprising for the plaintiff that the defendant No.2, instead of making
the payment flatly refused to make payment vide letter No. SAM/PUN/MES/1254
Dated 22 March 2023.
14. It is further averred that the plaintiff approached the defendant No.1 to
intervene and to give directions to the defendant No.2 to release the balance
payment as received from the defendant No.1, but all in vain, as the defendant
No.1 flatly refused to take any action against the defendant no.2 vide letter
No.84408/PNA/Vol-32/2916/E8 dated 11/04/2023, and said that delay in releasing
of payments and alleged final payment not released by the defendant No.2 is
governed by commercial transactions entered between the defendant No.2 and
plaintiff and therefore this office cannot dictate or release or withhold any payment
likely to be released to the defendant No.2 by the defendant No.1.
15. It is further averred that the plaintiff in response again requested to the
defendant No.1 vide letter No. RIPL/DL/SAM/CH-STP/2023/49 Dated
12/04/2023 to review the matter with copy to Chief Engineer Southern Command
with request to intervene in the matter to resolve the issue to protect the right of
plaintiff. But till date the situation remains unsolved and plaintiff has not had any
communication with any of the defendants.
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16. It is further averred that seeing no alternate, the plaintiff had sent a legal
notice to the defendants through his counsel dated 16/10/2023 demanding the
above mentioned dues, but the defendants did not comply the same, despite of due
service of the above said notice. Thereafter the plaintiff filed a pre-institution
mediation before the pre-mediation authority on dated 12/12/2023, but the
defendant refused to participate in the mediation process and authority issued the
report of Non-Starter on dated 11/01/2024.
17. The plaintiff has also given the details of cause of action arose to it to file
the present case against both the defendants, which is to be discussed hereinafter
and prayed for passing a decree for recovery of Rs. 73,81,953/- alongwith interest
@ 18% per annum till the realization of the said amount alongwith cost of the suit,
in favour of the plaintiff and against the defendants.
18. On the issuance of the summons to the defendants, the defendant no.2 has put
it’s appearance, filed the written statement and contested the case of the plaintiff on
the various grounds and filed the application under consideration and sought rejection
of the plaint on the ground that the suit of the plaintiff being premature and without
any cause of action. The Ld. Counsel for the defendant no.2 has submitted that as per
the work order dated 11.04.2020 the payment by the defendant no.2 to the plaintiff
was required to be made back to back basis and submitted that term 8 is also
mentioned in the said work order to this effect and submitted that since an amount of
Rs.3,78,94,500/- has been received by the plaintiff from defendant no.2 and in view
of withholding of balance amount of Rs.22,80,450/- by the defendant no.1, the
defendant no.2 could not make payment to the plaintiff and submitted that prior to the
receiving of the amount by the defendant no.2 from defendant no.1, the plaintiff could
not file the suit against the defendant no.2 and submitted that the suit of the plaintiff
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may be dismissed, as per provisions of Order 7 Rule 11 CPC, being premature and
without cause of action.
19. Ld. Counsel for the plaintiff has controverted said submissions and submitted
that at the time of disposal of application u/o 7 rule 11 CPC, only averments made in
the plaint are required to be looked into and submitted that from the averments made
in the plaint, it is crystal clear that the plaintiff has valid cause of action to file the
present suit against the defendant no.2 also.
20. The perusal of the plaint reveal that the plaintiff has filed the present suit for
recovery of Rs.73,81,953/- against both the defendants and para no.12 of the plaint
reveals that the plaintiff has averred therein that the cause of action arose to the
plaintiff to file the present case against the defendants on 13.04.2020, when the
defendant no.1 nominated to the plaintiff through e-tendering process conducted by
GE(1)(P)(CH) Pune under the delegation and entrusted with the responsibility of
executing specialized work under the PC SUM approved by defendant no.1 on
02.04.2020 and further formally implemented by GE(1)(P)(CH) Pune vide their letter
no.8031/2667/8E dated 13.04.2020 to execute STP and ETP work pertaining to BOQ
item no.2.80 (PC SUM) through defendant no.2. It is also averred that cause of action
further arose, when the plaintiff had completed the work diligently, in accordance
with the condition of the tender issued to the plaintiff. It is further averred that the
main contactor i.e. defendant no.2 continuously delayed the releasing of the payment
during the concurrence of the work and it was intimated to the defendant no.1, from
time to time and cause of action further arose, when, despite of several request made
by the plaintiff to make payment of balance amount of the work,the defendant no.2
did not make the payment and defendant no.2 flatly refused to make payment to the
plaintiff, vide letter no. SAM/PUN/MES/1254 dated 22.03.2020, it is also averred that
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cause of action further arose, when the plaintiff approached to defendant no.1 to
intervene and give direction to defendant no.2 to release the balance amount, as
received from defendant no.1, but, the defendant no.1 flatly refused to take any action
against the defendant no.2, vide letter no.84404/PNA/VOL-32/2916/E8 dated
11.04.2023 and cause of action also arose in favour of plaintiff and against
defendants, when, the plaintiff sent legal notices to the defendants through his
counsel dated 16.10.23 and demanded the due amount, but, the defendants did not
comply with the same despite of service of notices and cause of action also arose
against the defendants to file the present suit 11.01.2024, when the defendants refused
to participate in the mediation proceedings.
21. Since in the case in hand, the defendant no.2 has taken the plea that in view of
withholding of an amount of Rs.22,8450/-, the suit of the plaintiff is without any
cause of action, but, as the plaintiff has averred in the plaint, different dates, when the
cause of action arose to it to file the present case against the defendants and the
plaintiff has filed the present suit for recovery of Rs.73,81,953/- and the defendant
no.2 claims that it’s amount of Rs.22,80,450/- is withheld by the defendant no.1.
Thus, the amount claimed to be withheld by the defendant no.1 of defendant no.2 is
not similar to the suit amount.
22. Since their Lordship of High Court in case of Tilak Raj Bhagat Vs. Ranjit Kaur
& Ors. 2012 VAD (DELHI) was pleased to hold that:-
“wherein it has been held that it may be worthwhile to mention here that
while considering an application under order 7 rule 11 of CPC , the
court has to look at the averments made in the plaint by taking the same
as correct on its face value as also the documents filed in support
thereof. Neither defence of the defendant nor averments made int he
application have to be given any weightage. Plaint has to be read as a
whole together with the documents filed by the plaintiff."
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23. Their Lordship of Supreme Court in case of
Ramisetty Venkatanna & Anr.
Vs. Nasyam Jamal Saheb & Ors. in CIVIL APPEAL NO. 2717 OF 2023 was
pleased to observe as under:-
“
Now, so far as the reliance placed on the decision of the Privy Council
referred to hereinabove and on the decision of this Court in the case of
Subhaga (supra) are concerned, there cannot be any dispute with respect to
the proposition of law laid down in the aforesaid two decisions. However,
the question is the suit being barred by limitation and the illusory cause of
action. Now so far as the reliance placed upon the decision of this Court in
the case of Nusli Neville Wadia (supra) is concerned, again there cannot be
any dispute with respect to the proposition of law laid down by this Court
that while deciding the application under Order VII Rule XI, mainly the
averments in the plaint only are required to be considered and not the
averments in the written statement. However, on considering the averments
in the plaint as they are, we are of the opinion that the plaint is ought to
have been rejected being vexatious, illusory cause of action and barred by
limitation and it is a clear case of clever drafting.
In view of the above and for the reasons stated, the impugned judgment
and order passed by the High Court and that of the learned Trial Court
rejecting the application under Order VII Rule XI are unsustainable and the
same deserve to be quashed and set aside and are accordingly, quashed and
set aside. Consequently, the application submitted by the appellants –
original defendant Nos. 9 and 10 to reject the plaint in exercise of powers
under Order VII Rule XI(a) and (d) of the CPC is hereby allowed and
consequently, the plaint of Civil Suit (O.S.) No. 35/2014 is ordered to be
rejected. Present appeal is accordingly allowed. No costs”.
24. Coming to the case in hand, since the plaintiff has averred and explained
about the details of cause of action arose to it to file the present case against the
defendant, so, taking into consideration the averments made by the plaintiff in it’s
plaint, this court is of the considered opinion that since from the facts averred in
the plaint, the plaintiff is having cause of action to file the present suit against the
defendant no.2 and since from the law laid down by their lordships of High Court
and Hon’ble Supreme Court, in the abovesaid judgments, it is clear that at the time
of the disposal of the application under Order 7 rule 11 of CPC, only the averments
made in the plaint are required to be looked into and from the averments made in
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the plaint, it is clear that plaintiff has valid cause of action to file the present suit
against the defendant no.2. So, the application filed by the defendant no.2 under
Order 7 rule 11 r/w Section 151 of CPC is hereby dismissed, being devoid of
merit.
(PAWAN KUMAR MATTO)
DISTRICT JUDGE
(COMMERCIAL COURT)-04,
SHAHDARA, KKD,
Delhi/25.11.2024
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