Prathiba M. Singh, J.

1. These are a batch of appeals which have arisen out of disputes between Contractors/Plaintiffs (hereinafter, ‘Contractors’) on the one hand and the North Delhi Municipal Corporation (hereinafter, ‘NrDMC’) and East Delhi Municipal Corporation (hereinafter, ‘EDMC’), on the other. NrDMC and EDMC are collectively referred to as ‘Corporations'. The facts in each appeal are different and hence separate Judgment are being passed in each of the appeals.

2. Briefly, these are cases where various work orders were placed on Contractors by both the Corporations. The works were executed by the Contractors and thereafter, the Engineer-in-Charge has passed the final bills. Payments in respect thereof were not made. Suits for recovery were filed by the Contractors. The Trial Court decreed the suits in favour of the Contractors.

3. In the work orders, the Contractors seek either/all of the following payments:

(a). Payment of the principal amount as passed in the final bill;

(b). Refund of security deposit;

(c). Interest on account of late payment of the principal amount, as also due to delay in refund of security deposit.

4. The Corporations rely on Clauses 7 and 9 of the General Conditions of Contract in respect of payment of principal amount and interest, read with the amendment of 19th May, 2006. In respect of the security deposit, the Corporations rely on Clauses 17 and 45 of the General Conditions of Contract for Municipal Corporation of Delhi Works (hereinafter, ‘General Conditions of Contract’). In addition, the Corporations also rely upon Circular dated 10th June 2014 signed by the Chief Engineer, MCD which was issued in the nature of a clarification.

Background of the case

5. In the present case, the Corporation placed work order No.64 dated 5th March, 2014 for contractual amount of Rs.15,53,565/- on the Contractor. The time provided for completion of the work was 3 months. The Contractor submitted that it had completed the work before the stipulated time to the satisfaction of the Engineer-in-Charge. Security deposit to the tune of Rs.1,55,335/- had also been deposited in respect of aforementioned work order. Consequently, the Engineer-in-Charge prepared and passed the first and final bill of the Contractor on 13th November, 2014 for a sum of Rs.13,18,280/-. It was the Contractor’s submission that as per the final bill, the following amounts were due:

(a) Principal amount of Rs.13,18,280/-

(b) Security deposit/Earnest money amount to of Rs.1,55,335/-.

(c) Interest @ 12% p.a. on the principal amount of Rs.14,73,615/- calculated from the date of filing of suit till realization.

6. The Contractor issued a notice to the Corporation on 3rd March, 2016 calling upon the Corporation to make payments. Since no payment was received, a suit for recovery came to be filed. In the suit, the Contractor computed interest @ 12% and sought a decree for a sum of Rs.17,68,338/-.

7. In its written statement, the Corporation contended as under :

“4. There is a specific condition in the agreement entered into between the parties that the payment of bills will depend on availability of funds in particular head of account from time to time in North DMC. The payment of bills shall be made strictly on queue basis i.e. first the past, liabilities will be cleared and after that the release of payment for passed bills will be in order of the demand received at Head Quarter under particular head of account. Thus, it is submitted that the delay in making the payment do not attract any liability and the plaintiff is not entitled to any interest on account of delay in payment as per the amended rules incorporated by circular dated 19.5.2006 in N.I.T. Tender conditions. The plaintiff, after going through & understanding the terms and conditions of NIT as well as tender documents, had participated in the Tender and executed the work.”

8. The Corporation contended that the bills were not submitted by the Contractor and the amounts for which the bills w