The central legal point established in the judgment is the entitlement of a party to claim interest on delayed payments as per the provisions of the Interest Act, 1978, and the interpretation of contract clauses to support such entitlement.

Hima Kohli, J.:—(Oral)

1. The plaintiff has instituted the present suit against the defendants/MCD under Order XXXVII CPC for recovery of a sum of Rs.28,34,441/-.

2. The admitted facts of the case are that the plaintiff is a contractor and has been executing works of construction for the defendants/MCD for the past several years. In or around the year 2005, the defendants/MCD had invited tenders for improvement/widening of the parking space in Green Park Main Market in C-13/South Zone. In response to the said invitation, various parties, including the plaintiff herein, had submitted their tenders. At the time of submission of tender, the plaintiff had deposited earnest money of Rs.44,500/- and the balance amount of security was to be deducted from the bills thereafter. Finally, the work was awarded to the plaintiff vide Work Order dated 08.07.2005 for a contractual amount of Rs.21,85,937/-. The date stipulated for commencing the work was 17.07.2005. However, the work actually commenced on 20.07.2005 and as per the plaintiff, due to the delay on the part of the defendant/MCD, the work was finally completed on 27.10.2007, whereas the defendants’ stand is that the work was completed only on 15.02.2007.

3. It is the case of the plaintiff that after completion of the work, the defendants/MCD measured the same and it prepared the first running bill for a gross amount of Rs.14,69,937/-. Out of the aforesaid amount, the balance security amount of Rs.75,017/- was deducted and upon making other statutory deductions, the defendants/MCD had passed the said bill on 18.10.2006 for an amount of Rs.13,35,534/-. The plaintiff claims that after completing further work, measurements were recorded by the defendants/MCD and he had raised the second running bill for a gross amount of Rs.7,04,442/-. After deducting the gross value of the work executed and the balance security amount of Rs.57,276/- and upon making other statutory deductions, the defendants/MCD passed the aforesaid bill on 26.09.2007 for a sum of Rs.6,18,271/-.

4. The plaintiff claims that the work was completed by him to the satisfaction of the Engineers of the defendants/MCD and that the defect liability period of six months, as provided for in the Agreement, expired on 26.04.2008 and thereafter, the security amount of Rs.1,76,793/-, inclusive of the amount of the earnest money was also refundable to him. It is averred in the plaint that despite repeated requests, the defendants/MCD failed to make the aforesaid payments. The plaintiff then issued a legal notice dated 09.04.2009 dispatched by registered post, addressed to the defendants/MCD, calling upon it to pay the aforesaid amount alongwith interest, which was calculated @ 24% per annum on the aforesaid amount, within a period of two months from the date of receipt of the said notice. It is stated by learned counsel for the plaintiff that despite the fact that the aforesaid legal notice was duly received by the defendants/MCD, it failed to make any payment, thus compelling the plaintiff to institute the present suit against the defendants/MCD for recovery of a sum of Rs.28,34,441/-, alongwith future and pendente lite interest calculated @ 18% per annum.

5. Summons in the present summary suit were issued to the defendants/MCD in the prescribed format on 22.07.2009. Memo of appearance was entered on behalf of the defendants on 07.08.2009. Thereafter, the plaintiff issued summons of judgment to the defendants/MCD which was served upon them on 22.11.2010 whereafter they filed a leave to defend application under Order XXXVII Rule 3(5) CPC, registered as I.A. No.16391/2010. In the said application, the defendants/MCD had admitted having awarded the work order to the plaintiff and further stated that against the first running bill raised by the plaintiff, an amount of Rs.13,35,534/- was passed and released and against the second running bill, an amount of Rs.6,18,271/- was passed and released. It was thus averred that having receiv