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2009 Supreme(Del) 857
IN THE HIGH COURT OF DELHI AT NEW DELHI
HONBLE DR. JUSTICE S. MURALIDHAR, J.
A.S. SACHDEVA AND SONS (P) LTD. - Plaintiff
Versus
DELHI DEVELOPMENT AUTHORITY AND ANR. - Defendants
CS (OS) 882 of 2004
Decided on: 7th August 2009
Through Mr. Raman Kapur with Mr. Dhiraj Sachdeva, Advocate
Through Mr. Bhupesh Narula, Advocate.
The main legal point established in the judgment is the plaintiff's entitlement to recover withheld amounts, penal recovery, unjustified deductions, and compensation for delayed completion of a construction project under the construction contract with the Delhi Development Authority.
Headnote:
Construction Contract - Recovery of Amounts - Delhi Development Authority Act - Section 42 - Summary
Fact of the Case:
The plaintiff filed a suit against the Delhi Development Authority (DDA) for recovery of withheld amounts, penal recovery, unjustified deductions, and compensation for delayed completion of a construction project. The DDA contended that the plaintiff failed to rectify defects and was estopped from claiming certain amounts. The court framed issues and heard arguments from both parties.
Finding of the Court:
The court found in favor of the plaintiff on issues related to the signing and verification of the plaint, rejection of the suit on grounds of limitation, and removal of defects pointed out in the completion certificate. The court also held that the DDA was not justified in withholding certain amounts and that the plaintiff was entitled to interest on the claimed amounts. The court granted a decree in favor of the plaintiff for the claimed amounts along with interest.
Issues: The issues included the signing and verification of the plaint, rejection of the suit on grounds of limitation, removal of defects, justification for withholding amounts, entitlement to claimed amounts, entitlement to interest, and relief.
Ratio Decidendi: The court's decision was based on the plaintiff's ability to prove the removal of defects, lack of justification for withholding amounts, and entitlement to interest on the claimed amounts. The court also considered the absence of evidence to justify certain claims made by the plaintiff.
Final Decision: The court granted a decree in favor of the plaintiff for the claimed amounts along with interest.
S. Muralidhar, J.
1. This is a suit for recovery of Rs.32,53,458/- along with pendente lite and future interest at 12 % per annum in favour of the plaintiff together with costs.
2. Defendant No.2, the Executive Engineer of Delhi Development Authority (DDA), invited tenders for the construction of 59 Category-III, and 118 Category-II SFS Houses, 148 MIG flats, 36 shops and a community hall including stilted parking space and internal development (Nagin Lake Apartment) near Village Peera Garhi, Pashim Vihar. The tender of the plaintiff was accepted and the work was awarded to it by the Defendant No.1 DDA. The date of the completion as per the agreement was 1st December 1997. The maintenance warranty period was to expire on the completion of six months thereafter, i.e., on 30th May 1998. According to the plaintiff it completed the entire work to the satisfaction of the defendants DDA on 1st December 1997 and a completion certificate was also issued by the DDA. The final bill was prepared on 26th July 2002. According to the plaintiffs DDA arbitrarily withheld from the amount due to the plaintiff a sum of Rs.45,000/- on account of the alleged repairs and Rs.2,00,000/- without assigning any reason. The plaintiff therefore first claims that it is entitled to the refund of Rs.2,45,000/- wrongly withheld by the DDA.
3. It is stated that although the flats were constructed by 1st December 1997, the possession thereof was given to individual flat owners over a period of time between December 1997 and June 2000. According to the plaintiff, the DDA also recovered a sum of Rs.25,518.80 as penal recovery for steel enforcement and a sum of Rs.1286/- towards penal recovery of cement. The plaintiff claims that the balance unconsumed quantity of steel and cement was returned to the DDA. No notice was issued by the DDA under clause 42 of the agreement to the plaintiff about any alleged loss suffered by the DDA or on account of the excess use of these materials. It is accordingly contended that the recovery of Rs.26,705.36 on account of the excess use of steel or cement was unjustified. A refund is claimed of the said amount.
4. According to the plaintiff, DDA also arbitrarily recovered various amounts from the final bill. The total amount on this account worked out to Rs.2,20,827/- and the break-up of the individual items forming part of this amount has been set out in para 7of the plaint.
5. It is further claimed that the plaintiff had provided a steel glazed door of 546.20 sq. m. amounting to Rs.5,85,480/-, which the plaintiff was entitled to in terms of clause 6.4 (d) of the agreement.
6. In terms of the agreement, the work was to be completed on 23rd September 1995 but was ultimately completed only on 1st October 1997. The extension of time for completion of the work up to 1st December 1997 was granted by the DDA without levy of any compensation. It is claimed by the plaintiff that due to the prolongation of the contract period, the establishment comprising engineers, supervisors, chowkidars and other staff remained idle at the site. The machinery deployed by the plaintiff also remained idle. The plaintiff claims that it suffered losses on account of the prolongation of the contract by twenty-six months. Accordingly, the plaintiff claims compensation at the rate of Rs.20,000/- per month for the delayed period of twenty-six months amounting to Rs.5,20,000/-.
7. The plaintiff had a lawyer’s notice dated 28th July 2003 issued to the DDA asking it to pay Rs.19,77,284/- together with interest at 18 % per annum. DDA sent a reply which according to the plaintiff was frivolous. Therefore the plaintiff was compelled to file the present suit. The summary of the total claims made by the plaintiff is set out in para 14 of the plaint as under:-
“i) Towards amounts illegally and uncontractually withheld on account of alleged repair. Rs. 45,000.00
ii) Towards amount withheld without any reasons. Rs.2,00,000.00
iii) Towards unjustified penal recover
