The main legal point established in the judgment is that unadjudicated claims under a construction agreement cannot be recovered as arrears of land revenue without adjudication by a civil court, emphasizing the principle of legality and fairness.

SANJIV KHANNA, J.

( 1 ) BY order dated 2nd April, 2008, the following two questions of law were referred to a larger Bench:-

1. Whether on interpretation of Clauses 2. 29 and 30 of the agreement, the amount determined by the Superintending Engineer under Clause 2 can be recovered by DDA as arrears of land revenue without adjudication and a decree of a civil court? 2. Whether DDA can recover its claims due under Clause 2 of the agreement with the contractors under Section 40 A of the dda Act?.

( 2 ) THE said reference was made in view of observations made by a Division Bench of this Court in DDA v. Sudhir Brothers, 1905 (2) ALR 306 (DB), which were relied upon by a learned single Judge of this Court in his decision dated 2nd August, 2007, (Reported in 2007 (144) DLT 686) in Writ Petition (Civil) No. 5073/2003, Harinder Anand versus DDA and Others and Writ Petition (Civil) No. 1 1878/2006, Bharat. Construction company Private Limited v. DDA and others. Another single Judge of this Court in writ Petition (Civil) No. 3738/2002, V. K. Mittal v. Assistant Collector; Grade-1, DDA and others, 2003 (104) DLT, (Delhi) 349 : 2003 AIHC 3512) had taken a contradictory view. ,.

( 3 ) DELHI Development Authority (DDA)had entered into construction-agreements with third party building contractors. DDA claims and wants to recover amounts under clause 2 of the agreements as arrears of land revenue under Section 68 of the Punjab Land revenue Act, 1887. DDA claims that they are entitled to do so by invoking provisions of Section 40a of the Delhi Development act, 1957 (hereinafter referred to as the DD act, for short) even if DDA has not filed any civil suit and does not have any decree,

( 4 ) CLAUSE 2 of the agreement reads :-Clause-2: The time allowed for carrying out the work, as entered in the tender shall be strictly observed by the contractor and shall be deemed to be of the essence of the contract on the part of the contractor and shall be reckoned from the tenth day after the date on which the order to commence the work is issued to contractor. The work shall throughout the stipulated period of the contract be proceeded with all due diligence and the contractor shall pay as compensation an amount equal to one per cent, or such smaller amount as the Superintending Engineer Delhi Development Authority (whose decision in writing shall be final may decide on the amount of the estimated cost of the whole work as shown in the tender, for every day that the work remains uncommenced or unfinished, after the proper dates. And further, to ensure good progress during the execution of the work, the contractor shall be bound in all cases in which the time allowed for any work exceeds, one month (save for special jobs)to complete one-eighth of the whole of the work before one-fourth of the whole, time allowed under the contract has elapsed, three-eights of the work, before one half of such time has elapsed, and three-fourth of the work, before three-fourth of such time has elapsed. However, for special jobs if a time-schedule has been submitted by the contractor and the same has been accepted by the engineer-in-charge, the contractor shall com-; ply with the said time schedule. In the event of the contractor failing to comply with this condition, he shall be liable to pay as compensation art amount equal to one per cent or such smaller amount as the Superintending engineer Delhi Development Authority (whose decision in writing shall be final) may decide on the said estimated cost of the whole work for every day that the due quantity of. work remains incomplete; provided always that the entire amount of compensation to be paid under the provisions of this Clause shall not exceed ten per cent, on the estimated cost of the work as shown in the tender. Claim under Clause 2 of the agreement is for damages/compensation for delay in construction. While interpreting a similar contractual clause in the case of Vishwanath sood v. Union of India and another, A